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1. Any comments on the use of anonymous functions? I added them to keep the code as DRY as possible.
2. One thing I rather dislike is the line return strtotime('+' . $increment . ' ' . $rrule_freq_map[$rrule['FREQ']], $start_timestamp); which casts from integer to string and back for no good reason. Couldn't think of a better way to accomplish the adding of time.
3. On a Drupal specific note, maybe the use of date in $single_day_output() should be replaced with format_date, but I'm not sure if there are any gains from that.
4. $next_timestamp() will break if used in more than one location. Currently not an issue, would be interesting to hear suggestions on that.

1. Any comments on the use of anonymous functions? I added them to keep the code as DRY as possible.
2. One thing I rather dislike is the line return strtotime('+' . $increment . ' ' . $rrule_freq_map[$rrule['FREQ']], $start_timestamp); which casts from integer to string and back for no good reason. Couldn't think of a better way to accomplish the adding of time.
3. On a Drupal specific note, maybe the use of date in $single_day_output() should be replaced with format_date, but I'm not sure if there are any gains from that.
4. $next_timestamp() will break if used in more than one location. Currently not an issue, would be interesting to hear suggestions on that.

Code:

/**
 * Render the date and times of events.
 *
 * Has some internal helper functions do not make sense outside of this scope.
 */
function _custom_format_calendar_event_dates($datetime) {
 // Ensure we have the date_repeat_split_rrule().
 module_load_include('inc', 'date_api', 'date_api_ical');
 $start_timestamp = strtotime($datetime['value']);
 $start_day = date('Y-m-d', strtotime($datetime['value']));
 $end_day = (isset($datetime['value2'])) ? date('Y-m-d', strtotime($datetime['value2'])) : NULL;
 $end_timestamp = (isset($datetime['value2'])) ? strtotime($datetime['value2']) : NULL;
 $output = '';
 // Build the output for a single days event information.
 $single_day_output = function($timestamp) {
 $output = t('@day d. @date t. @time', array(
 '@day' => t(date('D', $timestamp)),
 '@date' => date('d.m.Y', $timestamp),
 '@time' => date('H:i', $timestamp),
 ));
 return ucfirst($output);
 };
 // Check whether or not the current has a repeat rule
 $repeats = function ($datetime) {
 if ($datetime['rrule'] !== NULL) {
 list($rrule, $exceptions, $additions) = date_repeat_split_rrule($datetime['rrule']);
 if ($rrule['FREQ'] !== 'NONE') {
 return $rrule['COUNT'];
 }
 }
 return NULL;
 };
 // When an event repeats, step forward the timestamp once.
 $next_timestamp = function($rrule, $start_timestamp) {
 static $count = 0;
 $rrule_freq_map = array(
 'DAILY' => 'day',
 'WEEKLY' => 'week',
 'MONTHLY' => 'month',
 );
 $increment = $count++ * $rrule['INTERVAL'];
 return strtotime('+' . $increment . ' ' . $rrule_freq_map[$rrule['FREQ']], $start_timestamp);
 };
 // Single day event.
 if ($end_day === NULL || $start_day === $end_day) {
 if ($rrule = $repeats($datetime)) {
 for ($i = 0; $i < $rrule['COUNT'] && $i < 100; $i++) {
 $new_timestamp = $next_timestamp($rrule, $start_timestamp);
 $output .= $single_day_output($new_timestamp);
 if ($end_timestamp) {
 $output .= ' - ' . date('H:i', $new_timestamp + ($end_timestamp - $start_timestamp));
 }
 $output .= '<br/>';
  }
 } 
  else {
 $output = $single_day_output($start_timestamp);
  if ($end_timestamp) {
  $output .= ' - ' . date('H:i', $end_timestamp);
 }
 }
 }
 else {
 // Multi day event.
 if ($rrule = $repeats($datetime)) {
 for ($i = 0; $i < $rrule['COUNT'] && $i < 100; $i++) {
 $new_timestamp = $next_timestamp($rrule, $start_timestamp);
 $output .= $single_day_output($new_timestamp) . ' ' . t('until') . '<br/>' . $single_day_output($new_timestamp + ($end_timestamp - $start_timestamp)) . '<br/>';
 }
 }
 else {
 $output = $single_day_output($start_timestamp) . ' ' . t('until') . '<br/>' . $single_day_output($end_timestamp);
 }
 }
 return $output;
}

/**
 * Render the date and times of events.
 *
 * Has some internal helper functions do not make sense outside of this scope.
 */
function _bornholm_custom_calendar_event_dates($datetime) {
 // Ensure we have the date_repeat_split_rrule().
 module_load_include('inc', 'date_api', 'date_api_ical');
 $start_timestamp = strtotime($datetime['value']);
 $start_day = date('Y-m-d', strtotime($datetime['value']));
 $end_day = (isset($datetime['value2'])) ? date('Y-m-d', strtotime($datetime['value2'])) : NULL;
 $end_timestamp = (isset($datetime['value2'])) ? strtotime($datetime['value2']) : NULL;
 $output = '';
 // Build the output for a single days event information.
 $single_day_output = function($timestamp) {
 $output = t('@day d. @date t. @time', array(
 '@day' => t(date('D', $timestamp)),
 '@date' => date('d.m.Y', $timestamp),
 '@time' => date('H:i', $timestamp),
 ));
 return ucfirst($output);
 };
 // Check whether or not the current has a repeat rule.
 $repeats = function ($datetime) {
 if ($datetime['rrule'] !== NULL) {
 list($rrule, $exceptions, $additions) = date_repeat_split_rrule($datetime['rrule']);
 if ($rrule['FREQ'] !== 'NONE') {
 return $rrule;
 }
 }
 return NULL;
 };
 // When an event repeats, step forward the timestamp once.
 $next_timestamp = function($rrule, $start_timestamp) {
 static $count = 0;
 $rrule_freq_map = array(
 'DAILY' => 'day',
 'WEEKLY' => 'week',
 'MONTHLY' => 'month',
 );
 $increment = $count++ * $rrule['INTERVAL'];
 return strtotime('+' . $increment . ' ' . $rrule_freq_map[$rrule['FREQ']], $start_timestamp);
 };
 if ($rrule = $repeats($datetime)) {
 for ($i = 0; $i < $rrule['COUNT'] && $i < 100; $i++) {
 $new_timestamp = $next_timestamp($rrule, $start_timestamp);
 if ($end_day === NULL || $start_day === $end_day) {
 $output .= $single_day_output($new_timestamp);
 if ($end_timestamp) {
 $output .= ' - ' . date('H:i', $new_timestamp + ($end_timestamp - $start_timestamp));
 }
 }
 else {
 $output .= $single_day_output($new_timestamp) . ' ' . t('until') . '<br/>' . $single_day_output($new_timestamp + ($end_timestamp - $start_timestamp)) . '<br/>';
 }
 }
 }
 else {
 if ($end_day === NULL || $start_day === $end_day) {
 $output = $single_day_output($start_timestamp);
 if ($end_timestamp) {
 $output .= ' - ' . date('H:i', $end_timestamp);
 }
 }
 else {
 $output = $single_day_output($start_timestamp) . ' ' . t('until') . '<br/>' . $single_day_output($end_timestamp);
 }
 }
 return $output;
}