Javascript: optimize loops

Hi,

I was just reading these posts:

http://jonraasch.com/blog/10-javascript-performance-boosting-tips-from-nicholas-zakas
http://www.nczonline.net/blog/2009/01/13/speed-up-your-javascript-part-1/

In particular, my question alludes to the second post from nczonline.net. Supposedly, this function that Zakas, the author created will give a boost in performance in loops:

function chunk(array, process, context){
    setTimeout(function(){
        var item = array.shift();
        process.call(context, item);

        if (array.length > 0){
            setTimeout(arguments.callee, 100);
        }
    }, 100);
}

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Two questions:
1) I'm wondering they there is a timer set to 100ms. Doesn't that slow down the execution?

2) What is the arguments.callee? What object is the arguments from?

Much thanks.