PWM (Pulse Width Modulation) is a type of analogue DC control used by some systems (eg: the old Aristocraft "Train Engineer" basic units) in place of a smooth variable DC power; if you're sticking with LGB power controllers then you don't need to worry about it, LGB use smooth DC.
As others have said above, unless the MTS chip has been fiddled with by someone then any LGB sound-equipped loco will run just fine on analogue; you won't be able to trigger things like bells and whistles directly from your controller like you can on DCC/MTS control, but you can still make them sound by placing triggering magnets at certain points on your layout. Most locos will also give a whistle blast or a horn toot before moving off, even on analogue control, and all the normal "running" sounds will work automatically including speed-dependant engine noises. When a loco is parked up, if you are VERY careful on the control knob you should be able to just balance it so the loco doesn't move, but the sounds are still "on", with engine tickover for a diesel and the nice hissing sounds of a steamer. Turning the control knob down past this point will cause the sound to cut out as there isn't enough voltage going to the track to run the sound chip.
So short answer is YES - an MTS-equipped loco with sound will still run (and produce sound) on DC.
Do beware with Piko, however - what goes for LGB is not always the case with them, locos equipped with Piko decoders and the separate Piko-branded sound chips will, I believe, NOT produce sound when run on DC power! The loco will run and it won't hurt it, but it will just be silent.
Jon.
