To address each of your questions:
1) When an event is reset, it means that another thread waiting on the event can now be signaled. In other words, a thread that is now sleeping (blocking) can be woken up to do work.
2) According to Event Objects (MSDN),
Manual-reset event: An event object whose state remains signaled until it is explicitly reset to nonsignaled by the ResetEvent function. While it is signaled, any number of waiting threads, or threads that subsequently specify the same event object in one of the wait functions, can be released.
Auto-reset event: An event object whose state remains signaled until a single waiting thread is released, at which time the system automatically sets the state to nonsignaled.
If no threads are waiting, the event object's state remains signaled. If more than one thread is waiting, a waiting thread is selected. Do not assume a first-in, first-out (FIFO) order. External events such as kernel-mode APCs can change the wait order.
So basically with a manual reset event you can explicitly reset the event, triggering any number of threads to execute. With an auto reset event, the OS guarantees that only a single thread will ever execute when the event is signaled.
3) Right, when an event is signaled, a thread is using the event to perform work. Any other threads attempting to access (signal) the event will be blocked.
4) In this context, schedulable means that a thread can be executed. Depending upon the event settings, the OS will pick one or more threads waiting on the event, and will execute them.
5) Waiting on the event means that a thread is blocking on the event object. While blocked, a thread is not executing any CPU cycles and is basically "put to sleep" by the OS.