Please note that I am not a domestic electrician by trade so you should regard the following as a resource intended to inform and to initiate a discussion and further contributions. However much we understand or think we understand about connecting generators to circuits and distribution systems, it would be folly to proceed without consulting an electrician experienced in the particular scenario envisaged.
Most portable generators differ from a normal domestic supply in that the neutral wire is not connected to the earth wire or the chassis of the generator. A domestic supply will almost always be referenced to earth i.e. the neutral and earth wires bonded.
To check if your generator is wired “floating live and neutral” you can simply measure the resistance between the supply wires and the chassis/engine of the machine with the generator switched off and disconnected. If there is no connection between the supply wires and the chassis/engine then you can be pretty sure that you are dealing with a floating live and neutral set up. Don’t try to check your grid supply in the same way as it’s not so simple to isolate.
Floating live and neutral is seen as being safer for most situations where a generator supplies a single piece of equipment. If the operator inadvertently touches one of the supply cables there should be no circuit created for current to flow through the operator via earth. In theory you could touch either one of the supply cables without experiencing a shock. It would obviously be a daft thing to do, so don’t.
In situations where the generator is used to power a circuit supplying multiple pieces of equipment the benefits of floating live and neutral are less clear-cut. It would be possible for a fault to exist somewhere in the circuit that connected the live wire to some earthed element that comes into contact with the operator. This fault might cause no immediate danger but if a second piece of equipment becomes faulty and connects the other side of the supply to a point that can contact the operator then you have a circuit waiting to electrocute someone.
When a generator is used to supply multiple loads from a common circuit it is usually best practice to reference the neutral and earth wires and to incorporate a Consumer unit with Residual Current Devices to protect the operator against the possibility of electric shock caused by contact with either of the supply wires.
The switching from one supply to the other often needs to incorporate a means of transferring the point where the circuit is earthed to the chassis of the generator (connected to an earth spike driven into the ground). If a circuit has multiple paths to earth then an earth loop is created which can act as an aerial resulting in buzzing and radio interference on audio equipment.
Whenever the wiring of a generator is altered to bond earth and neutral together this should be clearly marked on the generator.
Incorporating a generator into a domestic supply or as an alternative supply is a job for a qualified and experienced electrician. For those of you using generators in conjunction with motor homes or boats there are many forums that discuss the subject of proper earthing in far greater depth and with greater reservoirs of knowledge and experience to draw upon than I am able to. One particularly good resource is the canalworld forum athttp://www.canalworld.net. If you should find other resources worthy of note then please comment on this post with a link to them