In Event communication sender does not know which object will handle the event.
Delegate is type which hold the reference of method.
Delegate has signature and holds reference to method which matches its signature
so Delegate is like type safe function pointer.
button1.Click += new System.EventHandler(button1_Click)
System.EventHandler is declared as a delegate here
In .net Events work on the concept of Delegate (like Button Click)
Delegate is used when you do not know which code to invoke at run time
So at that time Delegate is used to handle Events
http://msdn.microsoft.com/en-us/library/ms173171(v=vs.80).aspx
