I looked up the 111, and while I don't currently use one, I used to have one. It takes the place of a lockon or a soldered track connection. It can feed variable power to the train, and fixed power to the accessory.
Here's how it works:
It has three screw terminals, each connected to one of the rails. It takes advantage of the fact that gargraves and ross have wooden ties, unlike the old lionel, which had metal ties. So if you want to use an insulated rail to activate a crossing gate or a semaphore, you can just put an insulated pin at each end of the rail, and connect a common wire from the screws terminal to the signal. Your transformer needs a set of common terminals, and a fixed voltage tap for accessories.
