Does ground plane wire need to be insulated?

Not necessary for performance, but I would say necessary for safety, and clarity within your wiring scheme. An uninsulated wire could cause short circuits or pose a danger if somethings derails onto it, or could cause unintended failure of isolated/insulated block operation.

Thanks for the quick reply.  Insulated it is.  Of course, I never have short circuits or derailments:-)

If the ground plane wire touches the track, you won't get sparks, but you will suddenly lose all TMCC/Legacy functionality.  The track and ground plane have to be isolated or the TMCC signal is gone.

Mike's video is quite instructive.  Also, in it he mentions the use of ceramic capacitors (0.1 micro-farad) in series with these inter-track ground wires.  For this use, he suggests a 50-volt rating for these capacitors.

Not mentioned in his talk is the need to isolate these ground wires from the grounded leg of the power system outlet using also similar (0.1 micro-farad) ceramic capacitors.  Note that I said "similar."  The thing is, you're are also needing an isolation from the 60-cycle current, but here you are dealing not with a 30-volt isolated system, but with a 120-volt system that also carries some troublesome over-voltage spikes.

So, at or near the outlet, your ceramic isolating capacitor needs to have a voltage rating more like not less than 400 volts (I'll have to check this voltage being adequate; and availability.

Briefly, model railroads get their UL labels on the devices used connect to the 120-volt power lines.  Obviously, these are the transformers as we know; but also the wall-wart transformer for the command base also has a UL label (and unusually this wall-wart has a 3-prong plug-- in which the ground prong carries the ground connection; the isolating capacitor for this ground being located in the command base circuitry).

As yet, suitable devices for extending the green ground for the purpose under discussion are not available as standard manufactured devices.  For those having special concern over such issues (layout exhibitors at public shows in the state of Minnesota for example) I will post here later a discussion of the legal issues.

It is best that the services of a qualified individual be obtained to make such a device.  A holder of an Amateur Radio license is often considered qualified.

And yes the wire should be insulated, and I would say also terminated with a wire nut.  Mike said as small as a #30 wire, but I would suggest, because of the involvement with the power system (green grounds and the neutral-- ie hot return-- wire are solidly interconnected in the residential service box) that a wire sufficiently large to not be easily broken be used, or otherwise protected.  A green insulation with a yellow stripe can be used to identify an isolated ground, if you want.

The common (and the hot wires for that matter) wires of the train transformers are isolated wires per UL standard 697 (Toy Transformers) and should absolutely not be interconnected to any other wiring system.

Note that while we often call the common wires of the layout "ground" wires, they are not actually ground wires, while these wires in this discussion are ground wires, specifically radio frequency ground wires (at the 455 kHz frequency).  The problem with them is that they can conduct a small amount of 60-cycle 120-volt power in an accident situation, and the isolation must keep such current below 5 milliamps (IMHO).  A typical source in an accident scenario is a power drill with defective insulation-- not very common but it does happen.

Old (wearing electrical hat) Engineer