I found an alternate Rainbowduino wiki that has some useful basic info at http://www.trochotron.com/w/index.php?title=Rainbowduino. In particular, there is a Rainbowduino Manual v1.1 at http://www.seeedstudio.com/depot/images/product/Rainbowduino_Manualv1.1.pdf that, though it is from 2009 and is not up to date with the v3.0b version of Rainbowduino, provides useful clues to puzzles I have been dealing with, such as the purpose of extra parts included with my 4x4x4 Rainbowduino cube that don’t fit Rainbowduino or the cube.
In the discussion of power options, it provides some discussion of the slide switch, without fully describing which position it should be in. I am GUESSING here that it should be in USB position when you power your Rainbowduino and display via USB. The other position is probably used when a wall wart is being used to power the Rainbowduino. Insert the usual legalese here that I cannot be responsible for your equipment if I am wrong about this.