Re: Two batteries or one???
Brokemerc: "I won't be using the trolling motor which I assume the battery 2 position is for, so what do you think, I could just hook up the two batteries and use battery 2 position for a back up???"
The small switch at the dash is probably ONLY for the meter it doesn't do any actual switching of the electrical loads from battery to battery. The way it sounds like it was set up is that only the trolling motor was connected to battery #2, it was kept charged using the isolator and everything else ran off battery #1.
The blue box should be an isolator and it will automatically keep the battery #2 charged.. All you would need to do is add a OFF-1-2-BOTH switch if there isn't one present. It would replace your master disconnect (if so equipped) and allow you to select battery #2 in the event of battery #1 being dead. All you should need to do is install the OFF-1-2-BOTH switch and connect a lead from battery #2 to position #2 on the Switch. Then leave the switch in #1 all the time, the only time you would need to switch to 2 or both is in the event of problem.
I wrote a fairly lengthy post about switches and battery setups here:
http://forums.iboats.com/showthread.php?t=228575
***EDIT*** I updated the post with a drawing that I think matches your setup..