This event must work regardless of the way you use to populate iGrid. This is an event related to drawing, not population process.
Note that you should enable this event manually in the v6.5. Here is the pertinent excerpt from the help topic for this event:
This event may be raised many times per second during drawing operations, etc. To provide the best performance, iGrid does not raise this event by default. To enable it, specify the igDCEventRowDynamicFormatting flag in the DynamicContentEvents property.