Hello John
That is an old hand cranked Megger and is indeed used for testing insulation around wires, in motors etc and is also used for testing to see if a wire is continuous or not (ie broken or bad connection in the middle). That one was usually used on 240V single phase type wiring, motors etc and when you do the insulation test about 500V is pumped into the circuit. A more powerful instrument was used on 415V wiring, motors etc. About 1000V is used on 415V or 3 phase wiring etc
We were still using those mongrel things into the early 80's and when we got some press button ones we thought we were made.
The testing can only be done on dead circuits (no power) and that light is more then likely an indicator that lets you know if there is power in the circuit or not. Hopefully not.
Another apprentice I was working with hit the test button when the circuit had power in it once. Blew the begeesus out of the meter it did. It was so funny
Megger is only a brand of meter but the industry uses Megger (for the instrument) or megged (as a process) as jargon.
The outer scale measures in million of ohms (megohms) and the inner scale is in ohms. For insulation you want to see infinity or close to it (the sideways 8 near 50 Mohm), if the reading is below 1 megohm then something is bad. Really, really bad. And for continuity you want as close to zero as possible. Anything over 3 ohm is really, really bad.
All of the above is very general information for those with no knowledge on meggers and their use. If you want to get more precise on the above info then please do so.
Cheers Scott
PS: the press button ones were great at TAFE when you wired up the autosparky's chair and table and hit the button when he went to sleep. The tables had a really nice aluminium strip around the outside which made a great zappy point with arms and bellies.
In those days autosparky dudes and my type of sparky bonehead did the same first year at TAFE.