I'd like to start this post by giving Cale Leiphart all credit for discovering these o-rings for use in Power Functions trains.
Much of the following article is not a necessity in using Power Functions in LEGO trains. However, what I will be describing is essential if you plan to use Power Functions to their full potential. I must warn you, however, what I am about to discuss is not for the faint of heart - you will need to use ...non-LEGO parts...
The standard O-Rings that come with the small, or standard, Power Functions train wheels are fine for most light or medium duty train applications. However, they are far too slick for heavy hauling or exceptionally long trains. You will need to buy replacements, and thanks to Cale, we now have a source.
I bought these O-rings at my local Lowe's hardware, but you can probably find them at any reputable hardware store that sells replacement plumbing parts. I realize the information on the package has been obscured by the textured plastic, so here is what you'll need to know. The O-rings are:
11/16" Outside Diameter x 9/16" Inside Diameter x 1/16" thick.
These particular O-rings are labeled #35, but your mileage may vary.
These replacement O-rings are the perfect size to snugly fit on the standard LEGO Power Functions train wheel. While they are thicker, their friction coefficient is significantly higher - that is to say they'll grip the rails much better.
Of course you'll need to remove the old O-ring. To do this, I find a toothpick works very well. Because the wood of the toothpick is softer than, say, the blade of a knife, there is very little damage done to the original O-ring or the wheel. Now I know you could simply cut the old O-ring off, but I wanted to save the old one in case I ever wanted to put it back for some reason.
With the replacement O-ring in place, you'll find that your newly upgraded wheels sit slightly higher on the rails than the old wheels. This will change a few things, especially if you are upgrading a steam engine where the added height might interfere with how the tender and the locomotive interact. However, you will also find that you will be able to add plates under the parts that hold the axles in place and still have them clear points and cross tracks, whereas they could not if you used other wheels, like small Big Ben Bricks wheels.
There are many, many ways to create a geared bogie for Power Functions trains use, and certainly many more elegant ways than this, but I find this design to be incredibly robust, capable of withstanding even the most grievous, gear grinding loads on the greatest grades. The secret, to the uninitiated, is the use of the 4x4 Technic bricks with hollow center. These parts connect the load of the gears and the wheel axles on the same piece, preventing them from falling out of place. The only point of failure is the gears falling off the 1x2 technic axles, but there are ways around that, as well.
Another benefit to the design is how very small and compact it is, allowing it to mimic the size and function of the standard LEGO 9v train motor. All that's left is making room in your MOC for a Medium or Large Power Functions motor to power it.
I am not trying to insinuate that Power Functions can replace 9v motors in every application, but maybe this will pique your interest and inspire you to experiment with LEGO's latest system. While it does have the significant disadvantage of being bulky and battery powered, I have personally seen it out muscle equivalent number of standard 9v train motors; a wondrous sight to behold, indeed.