IMO, the 2-rail/3-rail arrangement for the MTH convertible locomotives is a bit of a kludge. I get lots of repairs in that are related to that cheap switching arrangement. On PS/2 stuff with the polarity switch as well, I've had a number of people just have me remove both switches and hard-wire them to 3-rail operation.
Dave is, or course, right about the switching. you lose some continuity to the wheels with the 2-rail/3-rail kludge as well.