Installing Valves in HVAC Chilled Water Systems

It should be on the return side

Return side is correct. This is because the pressure in the coil will be higher and prevent air bubbles from getting trapped there. You use a 2 way valve typically for a variable speed pump, and a 3 way valve for constant speed pumps. Even if you had a constant speed pump, you could put a 2 way valve in on a small percentage of FCUs and the pump could ride the curve (and save some money), but you don't want to do too many or the pump could dead head or overheat.