setStyle uses the camelized version of the css property you wish to set. So, padding-top
should be paddingTop
.
Also, $() expects the parameter to be a string containing an element's ID, or an element to be extended.
If you'd like to select a number of elements matching a selector, use $$(). Please note $$() returns an array, so you'll have to manipulate each element by enumerating, or using a Enumerable method like invoke to make a call to each element.
try
Event.observe(window, 'load', function() {
$$('li.home').invoke("setStyle", {
paddingTop: '10px'
});
});