Any train that does not wish to stop at the station passes by it on the main line unimpeded.
Any train that does wish to stop at the station can proceed onto the bypass if it is empty, but must wait if it is full. When more than one train on my rail system stops at that station, I may make it long enough for two trains to stop without blocking the main line, as shown in the screen capture.
Trains leaving the bypass or the part of the main line that is in parallel with the bypass must not crash where the bypass and main line merge back together, obviously.
I am assuming the actual station acts as a rail signal, so I don't need another rail signal after it on the bypass.
Any advice?

Edit: umm...if the photo got cropped on the right on your screen, here's the whole thing: http://home.cogeco.ca/~glassdeviant/rail_bypass.jpg