E1 is one of the standards(like T1) used in digital transport networks.
It is nothing but a transmission media capable of carrying 2.048Mbps of digital data from one point to other. You can get more info regarding this from any basic GSM manual(like motarala CP02)
A E1 is generated at the BSC ET port. You simply patch a cable at this point and tap it out to any required place.
Total path between MSC to BSC = the physical distance between your MSC to BSC.