From Section 4.3 of JavaScript: The Good Parts by Douglas Crockford:
Invoking a function suspends the
execution of the current function,
passing control and parameters to the
new function. In addition to the
declared parameters, every function
receives two additional parameters:
this and arguments. The this parameter
is very important in object oriented
programming, and its value is
determined by the invocation pattern.
There are four patterns of invocation
in JavaScript: the method invocation
pattern, the function invocation
pattern, the constructor invocation
pattern, and the apply invocation
pattern. The patterns differ in how
the bonus parameter this is
initialized.
Crockford continues to explains the binding of 'this' in each of these patterns, as follows:
The Method Invocation Pattern:
When a function is stored as a property of an object, we call it a method. When a method is invoked, this is bound to that object.
The Function Invocation Pattern:
When a function is invoked with this pattern, this is bound to the global object. This was a mistake in the design of the language.
The Constructor Invocation Pattern:
If a function is invoked with the new prefix, then a new object will be created with a hidden link to the value of the function's prototype member, and this will be bound to that new object.
The Apply Invocation Pattern:
The apply method lets us construct an array of arguments to use to invoke a function. It also lets us choose the value of this. The apply method takes two parameters. The first is the value that should be bound to this. The second is an array of parameters.