Good Morning Paul.
I am a MA electrician and I will take a stab at your questions.
I've heard that some towns require bypass type meter sockets. What is the purpose?
First I would say it is not the towns, but the different power companies.
A bypass meter is a handy requirement, it can not be left in bypass to steal power.
The nice part about a bypass meter is meter replacement.
Open the meter can, lift the bypass which along with bypassing the meter releases the jaws letting the meter come out without any effort.
Install new meter, put bypass lever back down and close cover.
The cover can not be installed with the bypass lever lifted, unless it has been cut short, which have seen.
[This message has been edited by iwire (edited 01-08-2005).]