Working with RS485

[dhouston]

Does that mean that you dont need a 3rd wire running between devices if its on a small scale?

A 3rd wire is going to defeat your isolation. In many networks, power is supplied over the cable from a single source. That leads to mixing grounds and requires attention.If you will power each node individually, you don't have that problem.

I re-read the app note about grounding and there are 2 drawings. I think i might need the one in Figure 4.4 Isolated RS-485 Device. The only thing im not sure about is that that drawing shows the ground isolated from the circuits ground. Is it not enough to have the circuit etc isolated from the mains ground?

You have to either isolate it completely or deal with the mixed grounds. A little mixing of grounds is akin to being a little bit pregnant.

The simplest thing to do is run the ground wire between nodes but connect it to each local ground through 100-ohm current limiting resistors.

I recomment Jan Axelson's Serial Port Complete which covers RS232 & RS485. The subject is complex and really cannot be covered here.