First and foremost, keep your code simple, clean and well documented.
The only exception to this rule is if you have some very lightweight script specific to a single page or are setting up variables that cannot be done in the external JS. An external file results in greater scalability, maintainability and degradability. The correct way to reference an external JS file is as follows:
var div = document.getElementById('div');
div.onclick = new Function("processClick(this)");
Fourth, properly define and scope variables.
Many of the scripts I download hoping to use in a project I immediately throw out. The reason being that the programmer did not take the time to properly define and scope variables. Always reference the first instance of a variable by using var. Otherwise the only way someone can know if that is the first reference to that variable is by starting at the top and reading all the way down. It is also important to scope variables correctly. Don’t scope a variable on the global level unless you need it there. I also recommend differentiation of global and local variables though some kind of visual identifier such is all caps on global variables or some easily identifiable character.
<a href="link.html" onclick="processClick(); return false;">link</a>