From what I've seen in the hands-on videos, the switch does have to be on to view the images/videos in 3D. Otherwise they are shown in 2D. And I observed that even with the 3D switch on, when you first load a 3D picture, it appears as 2D for a brief second, and then the 3D kicks in.
Hmmmm - my memory from the CTIA 26 minute vid is that the switch is for the camera only, and that delay you saw was the normal auto-switching to 3D.