With batteries, you've a whole range of control products available to you. Airwire, Crest Revolution, RCS (Australia), RailLinx (RCS America), G-Scale Graphics' Railboss, and probably one or two more that I'm forgetting or that are no longer manufactured but still available 2ndhand. Of those, Airwire is the only one that uses the DCC control standard and offers a DCC output for sound or lighting function control decoders. (Which is only important if you must use a DCC sound or lighting control board.) Pretty much all of the boards will interface with a Phoenix or other 3rd-party standalone sound system, and most have at least some degree of lighting function control.
As for which system is right for you, first think about what level of control you desire. If you're after very basic control over speed and direction, then all of the various systems should do what you want. If you're looking to have very fine control over the speed, maybe control multiple locos with one transmitter, control lots of lights, sounds, etc., then your choices narrow a bit. Of those listed, Airwire is probably the most full-featured, with Crest's Revolution running a close second. Those are the two systems I predominantly use, because I like the high level of control they give me. It's been a while since I've used RCS Australia and Railboss' stuff, so they may have increased their functionality as well. I know RCS Australia has been working on new handheld transmitters to run their (and Railboss's, I believe) receivers.
I'd think for the mallet, you could get away with either an 18 or 21 volt battery. I did one with a 14 volt battery, and it was plenty fast enough for the owner, but it's not going to set any land speed records.
Later,
K