When would I need class 2 lights?

Modern wiring for lighting usually has a live, neutral & an earth. The live is usually a brown colour (though it used to be red) and the neutral is usually blue (though it used to be black) The earth wire is normally yellow & green. These 3 'cores' can be seen clearly in a piece of twin & earth cable (sometimes known as 6242Y)

Older homes sometimes have just the live & neutral wires in their lighting circuit. I found this in my current home when it came to replacing a light. Having taken the fitting down I discovered just the red & black wires. In this instance there is no earthing wire that would be attached to the earth terminal on my light fitting. If I refitted the light without the earth then the fitting could be potentially dangerous should a wire become loose inside the light.

This is often the way that a person discovers that they need double insulated light fittings. An electrician will remove a fitting to replace it only to discover there is no earth cable and is then bound by regulations not to refit the product.

http://www.lightahome.net/double-insulated-lights-33-c.asp

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