When do I upgrade my transformer?

Well, some locomotives will only run on AC as well.

Personally, I'd probably add a bridge rectifier to the DC-only models to make them an AC/DC locomotive at a minimum.  If you'd like to go all the way, for $15 there is a Lionel electronic reverse unit, all it takes to install it is four wires, two to the track pickups, and two to the motor.

Is there a primer describing how this is done?...and a parts list?....Thanks!

My preferred solution would be to use the Lionel 0107-100 reverse unit, available at several part suppliers for $15.  It's dirt simple to connect, two wires to the track common and hot pickups, and two to the motor.  Find a nice spot for it in the locomotive and enjoy.   They also make a little plastic holder for it that may make it easier to mount, I normally use double-sided sticky foam.

I see that Brasseur Trains has it, and so does The Train Tender.  I'll bet that Chuck at Mizell Trains has it as well, I don't see a parts listing on the site.

Thanks, I'll order one. I had looked at several sites but didn't know which model number I should use for a K-Line diesel.

The fact that it's a K-Line is not significant, it's just if it has DC motors.  

Jeff Kane called me tonight to make sure that I knew how to install the part. He also put me onto Davis Lyon (www.lioneltransformer.com) for a better transformer. Turns out Davis and I live less than a mile from each other. Small world isn't it?

My MTH trolley came with a DC transformer, too, but Jeff doubts that there is room inside of it to install the little circuit board to convert it to AC. Maybe I'll just run it on a separate track by itself.

The MTH "bump" trolley is AC with a DC motor and rectifier, MTH includes the cheaper DC power pack instead of a Z500/750/1000 in the trolley sets since it can run on DC too and the trolley barely needs any current to operate.

OK, the little K-Line transformer works well for one train and has AC terminals for a few LEDs, etc.

The MTH transformer can't handle my dual motor Lionel diesel so I need a better  transformer for it. Perhaps 40-50 watts? Any suggestions?

here's a 40 watt one on eBaywhich a whistle and direction button http://www.ebay.com/itm/Lionel...455d6fa#ht_500wt_922

I've managed to install TMCC boards in some pretty small stuff, I can't believe your trolley doesn't have room for that little board.

Sounds like I don't really need the board:

"The MTH "bump" trolley is AC with a DC motor and rectifier..."

Sounds like you're right about the Trolley.

Any body use MRC dual power transformers? I can get one for $45.

That would depend on the exact model.  They have a number of "dual-power" transformers, some of them are pretty low power.

I lean to the MTH Z-1000. Plenty of power in a decent package and readily available.

It also has a 14VAC aux power output but it shares the 100 watts with the main output.

I use the 14V to power switches, it works well.

I was able to run my Imperial Railking Big Boy (2 motors) with smoke pulling 51 cars powered by a single Z-1000 brick thru my TIU.

That included several lighted cars, so the power should be sufficient for your stated needs.

I wouldn't waste time with a 40 watt transformer.  I tried a 40 watt Lionel transformer with my 736 Berkshire and it would immediately trip the overload switch.  It would run all the smaller stuff just fine. 

I use a pair of Lionel CW-80s (one per loop) and love them.  If you decide to go that route make sure it's one of the newer "G" code versions. 

From what I've seen, I think the MTH Z-1000 transformers Russell suggested are the most popular on the forum.

I'm using a 40 watt Lionel and it's working fine for my needs. This is a layout for a 3 year old grandson so we don't need anything fancy at this point.

I opened my K-Line engine to install the DC to AC converter. The wires run through the opening where the slide switch should go; guess I'll have to drill a new hole for wires.

The can motor is mounted inside the truck so I can't see where the wires connect. I don't know which wire is which; do I dare take the truck from the chassis so I can see better.

Maybe there is a K-Line fan out there who can tell me how the red, yellow, blue and black wires connect to the motor and the pickup roller and how the Lionel 0107-100 reverse unit connects.

The Yellow and Blue wires connect to the motor, and the Red and Black connect to the frame ground and the center rail roller.  I just worked on one, and the black was the center roller, but I would have thought it would be the red.  In any case, the red/black wire connection isn't significant.

For a simple reverse unit, it won't matter if you swap the red/black power wires, it'll work the same way anyway.  If it starts up in reverse after wiring it up, you can swap the yellow and blue wires to make it start in forward.

There's also a reverse lockout switch on the reverse unit, if you like you can wire that to the slide switch to allow you to lock the unit in one direction.

Great, glad it all worked out.  Those reverse units are pretty simple, if you don't need the reverse lockout, just four wires.