Welcome to the forum.
Insulated blocks are used to control power to sections of track, either through the use of on/off switches, or different throttles/power supplies, depending on the use of the block. A siding can be powered through an on/off switch from the same throttle as the main layout. A layout can have 2 or more loops interconnected, and each loop insulated from the others. Each loop can then be powered by a different throttle, giving independent control of the trains, and also allowing trains to change loops. See here for a Lionel video on insulated tracks and blocks.