Can we create add-on for IE? If yes where can i find required resources/docs?
This is a good reference from Eric Law (Microsoft) in the different ways to develop Internet Explorer add-ons. Be sure to install the IEToys linked in the post to see some DHTML examples with source code.
Powering up with Internet Explorer Extensibility: http://blogs.msdn.com/b/ie/archive/2005/09/06/461675.aspx
Enhance IE Add-on Development: http://www.enhanceie.com/ie/dev.asp
IEToys: http://www.bayden.com/ietoys/