Be advised that the neutral wire is not the "return" wire. While it would be simplistic to visualize current flowing in only one direction; Alternating Current changes direction 60 times a second. So in reality the neutral wire is the return wire only half of the time.
The term neutral refers to the center or (neutral) tap on the transformer. As in (Forward Neutral Reverse) on a vehicle. The transformer taps on each side of the neutral provide the two hot conductors.
The neutral is grounded at the transformer and at the service entrance in order to insure the integrety of the neutral. As some of us have found out if the neutral is compromized and there is not a back-up pathway to conduct the current that normally returns through the neutral it will return via the other hot conductor. This will result in higher voltages than normal being applied to some circuits and causing a lot of problems. By "grounding" the neutral at the transformer and at the SEP you provide an additional pathway for the current to return to the transfomer.
Grounding of appliances is a seperate topic. The grounding wire or ground inside an appliance is there to make the frame of the appliance the same (electrical potential) as the ground that one is standing on. Thus if a hot wire inside the appliance touches the frame it will short out against the frame (hopefully causing the breaker to trip) and prevent you from being an unintended pathway for the current to return to its source.
[This message has been edited by dturner (edited 02-05-2003).]
