In many cases, the switch positions will be marked “O” and “U” (over and under).
Sometimes, the electric locomotive which is set to use overhead power for propulsion does not operate properly. In this situation, both transformers are able to control the locomotive, which is not as intended. The solution to this problem is to rotate the locomotive 180° on the track; this orients the locomotive so that the correct wheels are contacting the “common” rail of the catenary equipped railroad. This problem does not occur with Märklin’s three conductor system (two rails and a center stud contact in the cross ties) since the locomotive wheel sets are both connecting to the “brown” rails of the track. The center stud contacts and the catenary are each connected to the red terminals of the two different transformers.
Another common problem is seen periodically on auction sites such as eBay. The seller of an electric locomotive reports that the electric model locomotive “does not run”. They often note that the locomotive motor itself runs when bench tested with power applied directly to the motor, but it does not run when placed on the tracks.
In this situation, this is because the selector switch is set for “O”, but the track power is being applied to both rails. The sporting thing to do in this situation is to advise them of the existence of the selector switch. My experience has been that even when advised of the selector switch issue, most of the auction sellers are just glad to be rid of something which has caused them so much frustration.
The question does come up about using catenary powered locomotives with command control such as DCC. In the early days of Märklin Digital, the Märklin Factory advised that they did not recommend this practice because of reliability issues. In operation, the pantograph did not provide a consistent electrical path for the electric locomotive that was operating from catenary. With the introduction of load-compensating decoders, this problem seems to have been minimized.
Although it is possible to do so, using command control from the catenary wire still seems to be an ill conceived idea. Given that the typical command control system can control hundreds of locomotives, and given that the track power is always on with command control so passenger cars remain lit, using command control on the catenary wire seems to be ill advised.