DO.dom: Creating large DOM structures in Javascript
A more typical approach these days, if you have to create a lot of DOM objects in javascript, is to use a templating system, such as Mustache (see also iCanHazjs), and thus translate javascript objects into HTML. 
The advantages are readable javascript and optimised DOM object creation. The disadvantage of this vs. your library is that this doesn't deal with the event binding.

Your library certainly seems powerful, but I would say that this might be very hard to read if you have are creating a lot of DOM objects.
What you'd end up with is a lot of .js code that essentially replicates an HTML document fragment, but with less readability.  

This is the advantage of using HTML templates; that you can read the HTML structure easily, but in the javascript code, you don't have more than a line or two of code that does the DOM element creation.  Also, templating systems generally build DOM objects in an efficient manner.

Also, I'd look into something like jQuery entwine as a possibility for easy-to-read event binding.