I couldn't let it go so I did some more reading. This explains the whole thing quite well, the point of the remote solenoid is to take the stress off of the key switch. In figure 6, the short green wire with the arrow pointing to it, represents the jumper between the battery contact and the control contact on the starter.
www.aeroelectric.com/articles/strtctr.pdf
This guy wires it a bit differently, but it does accomplish the same goal, and all the start current doesn't have to go through the remote relay, it does however loose the protection CJD supposed about though.
http://www.oldengine.org/unfaq/solenoid.htm