Manual Switch Questions...

1)  Yes.  The points are connected by a rod to a small box mounted on a tie.  When the points move, the rod moves a crank on the box, which causes signals ("outer opposing signals") governing entrance into the block where the switch is, to display Stop, Stop and Proceed, or Restricting, depending on the desired result.

2)  That is a timer which prevents an employee from reversing a switch while there is a train closely approaching.  In theory, the amount of time is sufficient to protect a train that has passed the last signal governing entrance to the block and proceeding at a speed too great to stop for an unexpected misaligned switch or an unexpected engine occupying the Main Track.  In ABS similar protection is provided differently.  If there is no governing signal from the siding to the Main Track, an employee desiring to make a movement to the Main Track must either be able to see that the next signal in each direction on the Main Track does not indicate that a train is approaching, or (when the signals are not visible at that location) open the switch (thereby activating the controller box in answer 1) and wait at the switch for 5 minutes (and be prepared to line it back for Main Track movement if a train approaches).  After the expiration of 5 minutes, the movement may be made to the main track and must operate at Restricted Speed until the leading wheels pass the next signal that indicates some sort of Proceed indication* (because it has not yes passed a Proceed signal and signals protect a number of things in addition to train occupancy, such as broken rails and high water detectors, where they are used).

That basically answers the signal questions you asked.  Remember, too, that a movement must additionally have some form of authority to occupy a Main Track.  This could be Yard Limits, Restricted Limits, Train Orders, Track Warrants, numbered Clearance Card, timetable schedule, OCS, verbal authority from the Train Dispatcher, or a Proceed signal on a Controlled Signal in CTC.  It's complex, but not complicated.

* Any signal indication except Stop.  This includes Stop and Proceed, Restricting, Approach, etc.

Thank you.  A very detailed answer.  The manual switch with a timer...I assume it also throws the signals red...assuming there isn't a train sitting there waiting for it the be opened?  Don't some of these switches and derails have power locks?  The derails for the spur in the pic I posted are also wired into a silver box.

What are the rules for where derails are to be located?

The signals would not necessarily be red.  They could display other indications.  See answer 1 to your original question.  On former Santa Fe ABS, if you are, say, running on the Main Track and intend to leave the Main Track and enter a siding, you might stop at the siding switch and be looking at a signal displaying a green aspect.  When the Brakeman reverses the switch, the signal displays Flashing Red (Restricting), for movement into the siding.  This is useful when one train is occupying the Main Track between the siding signals and the crew lines the switch for an opposing train to take siding.  That eliminates the extra delay which would result if the opposing train had to stop at a red (Stop and Proceed) signal and then proceed at Restricted Speed into the siding.  The point is that, the controller box causes the outer opposing signals to display some indication that will prevent another train from approaching the switch at greater than Restricted Speed.  Other rules protect trains that have passed an outer opposing signal and have been delayed before coming into view of the switch.  It all works together.

If there is a train occupying the Main Track within that block, the timer runs longer than if the block is unoccupied.

There are no rules for where derails are to be located.  That is covered by the individual railroad's Engineering Standards, and varies somewhat.  Basically, derails are supposed to derail equipment away from the Main Track before the equipment gets near enough to foul the Main Track (i.e., close enough to be struck, "cornered" scraped, raked, etc.).  Some derails known as Pipe Connected Derails, are connected to the switch stand by rods and cranks, so that, when the switch is reversed, the derail is automatically removed, and , when the switch is lined for its normal position, the derail is applied.  This is out of favor because of maintenance and safety considerations, but some still exist.  Many Conductors have thrown their caps on the ground and jumped up and down on them, cursing a blue streak, due to incidents involving Pipe Connected Derails and inexperienced or distracted Brakeman.

Sometimes derails have controller boxes so that the Main Track signals cannot indicate Proceed unless the derail is lined and locked in the derailing position on the auxiliary track.  Most don't but some do.  It would take a long answer to explain why, but it all makes sense.  In CTC where the Main Track authorized speed is greater than 20 MPH, if a train or engine is going to clear the Main Track, there must either be a governing signal which governs movement to the Main Track, or a time lock.

As I said, it's complex but not complicated.  When you step back and view the track for a couple of miles in each direction from the location of the switch, it all fits together logically.

One thing I did not mention:  There are two styles of time locks.  The older style, which you pictured, is mounted on a tie and the timer begins to run when the switch lock is removed.  This type has an Achilles' Heel in that an employee can "help" the timer by striking it with a large rock or other heavy object, thereby defeating the safety protection provided by the time lock.  The other style, used by Southern Pacific for decades and by almost all railroads nowadays, is a box on a short post near the switch.  When an employee unlocks the door on the box and opens it (some also require pushing a button), the timer starts and outer opposing signals display Stop.  After the timer has run, the employee can operate a crank lever 180 degrees and can then operate the switch.  This style of time lock is less vulnerable to tampering.

Not hand-thrown switches and derails.  

Dual controlled switches and derails (operated by electric motors normally) have a locked lever that allows the switch or derail to be used manually by use of a second lever.  It has two positions: Motor and Manual.  Some are operated by inserting a crank rather than by a lever.  Perhaps that is what you were asking about?

Here are some closeups I took today.  Any help in discussing the various parts would be appreciated.  Some background: This is the NS (Former Southern Main) in Easley SC.  Its busy with about 25-30 daily freights plus 2 Amtraks (Crescent).  The track nearest me in all the pics is a yard track that comes off the main # 2 to my left out of the scenes down at the other end of town...I take pics of where it goes back into the main.  Also the 3rd track used to continue on as the Pickens Railroad.  An 8 mile branch to Pickens SC.  It was abandoned and the towns are going to build a cool rail trail.   I took these shots because I feel NS is going to clean up the switches etc making what is left essentially a much needed storage track.  I am wondering if they will remove the far switch at the other end of town and keep the one I photograph.  The reason being that they are installing ATCS and new signals as you see in the shots.  Might be easier to wire this manual switch in where there is already a relay shed.  They also dropped a huge shed near the crossing.  Too big for the crossing gates which already have one.  Not sure what is up.   Also, you can see they painted the switch orange.  Perhaps they are turning the one part into a derail...which makes me think they are keeping that.  You can see two manual switches.  One with the timer with initials I can't make out 'SRS' and Bethlehem Steel 1967 on it.  Very cool   The other manual switch has a lever only but you can see it too is wired in through the gravel.  Lots going on here.  Also some 1926 rail. Enjoy and comment on the photo study...