Signal emission is the process whereby GTK runs all handlers for a specific object and signal.
First, note that the return value from a signal emission is the return value of the last handler executed. Since event signals are all of type GTK_RUN_LAST, this will be the default (GTK supplied) handler, unless you connect with gtk_signal_connect_after().
The way an event (say "button_press_event") is handled, is:
Start with the widget where the event occured.
Emit the generic "event" signal. If that signal handler returns a value of TRUE, stop all processing.
Otherwise, emit a specific, "button_press_event" signal. If that returns TRUE, stop all processing.
Otherwise, go to the widget's parent, and repeat the above two steps.
Continue until some signal handler returns TRUE, or until the top-level widget is reached.
Some consequences of the above are:
Your handler's return value will have no effect if there is a default handler, unless you connect with gtk_signal_connect_after().
To prevent the default handler from being run, you need to connect with gtk_signal_connect() and use gtk_signal_emit_stop_by_name() - the return value only affects whether the signal is propagated, not the current emission.