NOTE: Any type of wool may be used to change the color of the wire. You can also combine a dye with an insulated wire to change its color.
When connecting machines or circuits that are close to each other and need to be powered separately, Insulated Wires are a good solution as different colored Wires will not cross.
Bundled Cables can also be used to take many individual signals to a location and then Insulated Wire is used to make the end connections to the appropriate circuit or source with the same colored Wire.
VideosEditTekkit Classic - Megalith Tutorial Series - Part Two - Basic Wiring Principles(11:05)