SREG is the status register, it has the global interrupt enable bit in it. Without digging into the micros() code, I imagine that the interrupt bit is what's being manipulated there.
The other registers are for Timer0.
I haven't played with input capture myself, so I'd like to give it a try. The cool thing about it is once the setup is done (and that shouldn't be all that bad), then there's not much to do, like I said, very clean implementation.
I'd be game collaborating a bit if you would be. Should be able to hammer out a demo very quickly.