http://www.youtube.com/watch?v=bxmd6mUo7dk&feature=player_embedded#!

Awesome!.. How are the sound effects done?

Its not Sound Effects. Its the original Model Engine sound produced. In Model Railroad it is named as Digital On Board Sound(DCC Sound) Enabled Engine. We do have the controller which operates the Train. When the command for the Start Engine, Horn, Cabin Light, Brakes are given it works as a real working train. The movement sounds are produced automatically without any commands depending on the speed of the train. Which resembles the same like real working of Engines.

This DCC Sound is available for Diesel Locomotive,Electric Locomotive and Steam Locomotive.   

The sounds in the video were quite loud.. are the on on-board sound units so loud?

Yes absolutely. Its Horn is Too Loud depending on certain Locomotive.  Since it was taken by Camcorder you can hear some additional Noise in it.

Simply brilliant. Wonderful !!!!