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I have a question about 3 rail o guage model trains...?
If one doesn't have all those fancy computer chips and has vintage locomotives from the 50's that one wouldn't want to modify, how can one run multiple trains on the same loop? Also, with the three rail, is a reversing loop possible without fancy wiring?
When you are talking about switches, do you mean like an electrical switch, or a turnout? I'm so confused! So, you would have independent "blocks" of track insulated from each other? How does one achieve the insulation?
Loops are no problem with 3-rail, because it's symmetric (the two outer rails have the same voltage).
To run multiple trains without having to modify the trains you will have to divide your track layout into isolated sections. You will need to think about in which sections of your layout you want to have different trains moving. You will need more than one transformer too - obviously.
The trick is not to connect the transformers directly to the tracks but to use rotary or radio-button switches for each electrical section to choose which of the transformers provides current to it.
That way you can set up a kind of "electrical interlocking" by setting all the sections a train should use to the same transformer.
This type of setup surely has a special name for english speaking model railroaders, unfortunately I only know the german name "Z-Schaltung". You can find a rough concept draft at http://www.thema-schmalspurbahn.de/elektrik/zschalt/zspic1.gif ("Gleis"=track, "Regler"=controller/transformer).
The best thing about it: if you plan to use a digital control system someday: simply add it as another controller and switch all the track sections to it 
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