I don't want to bog down this thread, but I have completed 4 BlueRail Installs. 3 of them with MTH engines PS3. I have videos on OGR you could search or just go to YouTube and search ron045 or BlueRail. Most of mine show up.
The BlueRail board can be powered by AC, DC, DCC or Battery (Also DC). When flipping the switch on the PS3 board from DCS to DCC all the PS3 board cares about is the output from the BlueRail Board.
With BlueRail, no DCC equipment is needed. I run my Altas BlueRail engine on track power with a Z4000. I can run BlueRail, DCS and Legacy on the same track at the same time.
My three MTH PS3 engines are all battery power. If you go the battery route, just be sure to disconnect or remove the pickup rollers. You do not want track power and battery power at the same time.
Feel free to email me with any questions about my setup after you watch the videos. I like to think they are self explanatory, but they may not be clear for everyone.
I just purchased two engines for my next project. A Weaver SD40 and an MTH GP38 PS1. All the electronics are being ripped out for BlueRail, Soundtraxx and battery. They should all fit onboard the locos without a battery tender.
Have Fun!
Ron