The patches simply alter some of the functions of the Kobo, fixing issues that some feel prevent their enjoyment of the device. These patches are fully described both in the patch file for a given revision and in forum threads.
There is no linkage at all between "dev mode" and the patches.
Unlike some devices, Kobo's have no need to be rooted, instead all that happens is a patched version of the Kobo supplied software is copied to the device, and then the exact same procedure as Kobo uses for their updates is used to install the modified software. This installation process is based on the existence of KoboRoot.tgz in a specified directory on the device which is then expanded and de'tarred by the Kobo.
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