Reel Break,
Your question is a bit confusing, because you ask 'What determines when a disconnect is needed'. The answer is _always_. You always need to have a way to shut off power to a building. The rest of your question suggests that what you are really asking is when can the main breaker in the 'main' circuit breaker panel be used as the disconnect, and when does a separate disconnect need to be placed near the meter.
The code references supplied by others go to answer that question. If you think in terms of always having a main disconnect, and asking how far the conductors prior to the disconnect can extend into the structure, the answers will make sense.
-Jon
