Yes, handbills are an effective method for promoting an event, because it gives everyone a written reminder for where and what for the event. Most people do not park near a trash can, so they will not go throw the paper out right away. A person can find interested people because they can put the fliers in a particular spot near the event.
I think handbills are an extremely effective method for promoting an event. Handbills are a much cheaper way of advertising. You can get your message out to more people by using handbills instead of advertising in a newspaper or on the radio. Handbills get people's attention with large, bold lettering used to describe a single event which is better than burying an ad in a newspaper.
Handbills can be an effective marketing tool for event promotion. They allow for personal interaction with potential clients and customers. It is a very cost effective means of spreading the word locally. Handbills can generate great word of mouth. However, unless you combine it with some other marketing and advertising techniques the results will be limited.
I do not believe handbills are an effective method for promoting an event. I suppose they are helpful to those who may be interested, but generally people make these handbills for a variety of reasons and then try to blindly hand them out. I've used a few handbills for events, but I've come across many more that weren't useful at all.