This only applies to Cyclowiz:
If the switch is on, (aka wires together) the chip is in programming mode. If the chip is in programming mode, it does not work as a modchip. So unless you want to render the chip unusable, it is no good idea to solder the wires together. At least unless you just want some additional, but completely useless hardware in your Wii
As the programming mode has to be enabled and disabled during the upgrade process, soldering the wires together just for the update ist also not an good idea.
What I did: I installed the upgrade while the Wii was open. I opened the Wii, soldered the switch in, did the upgrade, unsoldered just the switch and secured the wires(!!!), closed the Wii again.
Using this method there is no switch on the outside. But of course, if there ever is the need to update the Cyclowiz again, I will have to re-open the Wii and re-solder the switch. I hope I wont need to do this soon, as everything is working perfect right now with the 3.0 upgrade.