A mechanical question as much as electrical... Any model railroad book I've ever read was focused on US HO/N or occasionally UK OO/N, so 2-rail was assumed. With 3-rail, how do you avoid shorts from the pickup shoe? With, say, Lionel track, it appears the center rail is the same height as the running rails. At a turnout or crossing, the shoe would contact the other rails. This could be solved by making the point rails dead (with pickup from both outer rails, it wouldn't lose contact), but there's something else that stops this line of reasoning.... Märklin track with center studs. The studs appear significantly lower than the running rails. How does the pickup shoe get through turnouts at all?
On my old Tin Plate, there was no frog in the switch. The point rails rotated to line up with the diverging rails and changed polarity.
On the Marklin, it looks like the frog is dead and the shoe just rides up over the rail. The point rails are sort so stay live with the studs right down the middle.
Just so folks will know, the example Russell has pictured is a Marx O-27 manual switch. The old Lionel functioned this same way. Current day Lionel Fastrack might be different.
The closure rails can be dead as the outside running rails are of the same polarity and still active. In addition the Marklin turnouts have live power at the bottom of the flangeways through the frog, providing additional contact points.
Just to add a little more mud to the water, what is now Hornby in the UK used to be Tri-ang. There used to be Hornby Dublo (or, in France, Hornby Acho) which was the rival firm, and Dublo had three rail, but it went off the market around fifty years ago, and I have no idea how that worked. Any brave souls who run model trams (streetcars) with the live overhead have a form of three rail, where the rails in the street are of the same polarity, and the overhead wire is the other pole. This would apply to anyone using those lovely Kato G-G locos! Regards, Pete Davies