Thanks scooteraz. Great explanation.
And thaus, I'll go further and state that Fender should change the wiring configuration in all future standard strats to be the same as the EJ's. It's a much more usable and (most importantly) toneful layout. A real improvement over (gasp!) vintage. Remember- during Leo's tenure at Fender the strat never received a 5-way switch.
I never really used the middle pickup on my other strats except for position #2 & #4, same as most strat players. However it is my favorite now. I use it to get a raw acoustic tone and it sounds great with finger-picked arpeggios kind of stuff. The in-between tones sound extra "clucky" too, especially the neck/mid position, very articulate. Probably since that position always had two tone knobs to go thru to get a sound it's nice to hear it "open up". The fact that the pickups themselves are incredible for a production strat helps too