#2
that kind sir is a phase reversal switch, what it does is changes the way your guitar pickups are wired when they are both on (middle position on an lp for example) they can either be series or parralell, i forget which one but jimmy page and peter green use one to get a more quacky sound in middle position, the other is just like on a normal guitar

that switch is exactly that, only it works with active emg pickups.
#3
thanks man! lol i was hoping that maybe it would be like a phaser that you put in your guitar. hahahahahahaha