Well here goes.
TMCC works well on two rail by itself. I had trouble with it interfering with DCS at the same time on the same rails. I'm sure it was just me. I could get it to work but with only one TMCC 2 rail Atlas engine, why would I bother? At the time, I couldn't find any more available. With MTH into S scale now, I'm sure they get it to work together.
You can't mix DC and AC engines. Well you could, but it gets complicated. Maybe using an AC transformer for supply and into the TIU, outputs fixed 1 and 2 would be AC, with full bridge rectifiers on the variable channels 1 and 2 outputs (dc) could run them at the same time on different tracks. Is that what you were asking?
The TIU can be used with DC only on the two fixed channels.
If you want to run TMCC equipped, you would use AC. Engines without decoders would be just DC. MTH's can be run with either. I've heard newer TMCC and Legacy can run on DC but I don't know the distinction in models. Lionel doesn't support any O scale two rail anymore so there's no new ones (legacy) out there.
