Insulated tracks what are they for and how do they work.
Insulated tracks are used to make a short circuit between the two outside rails. This is done by insulating one of the outside rails and installing pins installed on both ends of the insulated rail. This is done by installing heavy pieces of paper between one of the outside rails and the track ties. Because the ties are also metal, it electrically separates that rail from the other rail. When a train hits the track it creates a short between the two outside rails.
What are they used for?
Lionel and other manufacturers make some great accessory toys to work with your layout. Examples are a crossing gate that goes down when a train goes by, or the little man that comes out his shack or lighting a set of X lights to name a few.
Wiring them is very simple just run a wire with accessory power to one of the power terminals of the device and another wire from the insulated track rail.
Originally Lionel used to sell an adjustable switch that went under the tracks. What was wrong with that system? Engines are heavy, cars are light. If you adjusted the switch for an engine, the cars may be to light to activate the switch. Eventually Lionel discontinued these switches in favor of the insulated track sections.
Brainstorm: The only problem with this system is: what if the train is coming from the other side of the insulated track, and the gate will come up while the last car exits the insulated track section. Solution: Use 2 insulated track sections one on either side of the device you want to activate and attach both the wires from the 2 insulated track sections together. By the way the insulated track sections we make have wires soldered on the insulated tracks for ease of installation.