The way to think about it is in 3-rail the center rail is hot and the outside rails are ground and not insulated from each other. In 2-rail the rails are insulated from each other regardless of AC or DC. Also remember that in a single car or locomotive you cannot mix and match which side is insulated as it will create a short unless there is insulation between the wheel sets.
2-rail dead rail is easier, but as I know people are going to say it is SO much more expensive.
