observer pattern vs delegates and events?

I am just starting to get a handle on design patterns and C#.

Does anyone have any advice as to when use the observer pattern over Delegates and/or actually registering a .NET event.

My guess would be that a simple ICustomObserver interface and textbook examples of the pattern would have less overhead than the formal .NET approach

Delegates seem to become much more useful when you want to pass a type safe function pointer to some object's method. Delegates are also used in events (that is kinda why I am bringing all 3 up). But my impression is that I should think of delegates as a type of parameter (or variable) that stores a method address. Is that right

Events seem to be more like the observer pattern. But they are derived from system.object (at least), that must cost something. I am thinking that maybe I use events in only the GUI layers and not any of the lower layers Has anyone tried this

Sorry to be all over the place with these questions, but i think they relate.......

Thanks for all response!

Bob