Tk Russel wrote "This system is usually two eight foot ground rods , spaced 6 foot or more apart, and a wire going the water system. If you have a water meter, the #6 wire may need to connect to both sides of the water meter to jump out the meter, so to speak."
This is incorrect... Sorry tk but the NEC requires that anything within 2/0-3/0 Copper or 4/0-500 kcmil requires a # 4 Copper wire for a grounding electrode to the water main only if such pipe is copper and in direct contact with the earth no less that 25'( usually you would just hook it up anyway and always jump the meter). Now the ground rods are okay to use with #6 copper wire and must be green or reidentified inside the panel or meter box.
Now to the service question a 2 bedrm house with 1 bath seems quite small for a 200A service. Now I don't know the demand of the house and maybe you want a Hot tub outside (which requires a 200a service) oR you have a lot of electric heat... But 9 times out of 10 an electrician will suggest a 200 a service to get the 17-1800 dollars (Massachusetts price) but in reality 100 or 150 a service will do just fine and also the sizing of the wire tk got it right a 4/0 SER aluminum cable is great and it depends on the disconnect. If it is 25' on the exterior of the wall and penetrating through the house the wire goes directly to the panel ( Usually 10' in wire length) there is no disconnect required. Copper for residential wiring is not needed considering we up here in mass feed 5 unit bldgs with 125 A Panles each with 500 KCMIL Aluminum wires and lasted for 10 years thus far no problems. Hope this helps
