This is easy to ignore, because there are no right and wrong ways to do it. If everything is working as it should, then as long as the cables are connected there will be no problem.
In principle, each LocoNet device comes with two telephone style connectors; the wires simply get daisy chained together. However that isn't the neatest solution, and will make debugging difficult. What I chose to do was to split the LocoNet up into sections, with a "bus" joining the sections with wires into different areas "tee"d off from the bus. That way, any one area can quickly be isolated for maintenance or if a board fails.
This LocoNet connection is possible because of a module called a "UTP" from Tony's Train Exchange in USA. It provides four connectors all "properly" paralleled with each other. The Digitrax UP3/5 panels do not do that: the outer wire "railsync" signals are not propagated to the front two connectors in the same way. There are also telephone connectors that can be used to parallel up connections but I've never found them very reliable.
|Two UTP panels||