* He lived in London and employed with British Telecom.
This sentence is incorrect as it stands, because one cannot "employ with" a company. "To be employed" should be in the passive here, and it would be more natural to use "at" than "with".
He lived in London, and was employed at British Telecom.
Now we can address the question: what would happen if we replaced "lived" with "used to live", and with "would live"?
He used to live in London, and was employed at British Telecom.
This wouldn't be used in an obituary (that is, newspaper article about someone recently dead), because it's very stark. "He used to live…" is a strong reminder that the person is in fact dead. It's grammatically correct, and the choice of tense is naively the correct one, but we would consider it too insensitive. "He used to live in…" sets up an expectation of the clause "… but now he lives in…", to which the answer is "nowhere: he's dead, thank you for reminding me about this sad event". Therefore, we use "He lived in…" instead.
He used to live in London, but now he lives in Singapore.
In this instance, "used to live" is correct, because the sentence goes on to say where he now lives.
He lived in London, but now he lives in Singapore.
This is a bit of an odd construction. It could conceivably be correct - in answer to the question "where did he live?", for instance - but as a standalone sentence, it's worse than "used to live". It's still completely unambiguous, but it sounds a bit clumsy.
* He would live in London, and was employed with British Telecom.
This is wrong because the tenses are mixed up between the two clauses. I'll elide the tense of the second clause from now on:
He would live in London, employed with British Telecom.
This is correct grammatically, but it means either of the two following:
- (while telling a story about his life) At the present time in the story, he's not living in London. It's significant to mention at this point, though, that in his future he would eventually come to live in London, employed with BT.
- (archaically) He wants to live in London, employed with BT.
Note that the first (and most common) interpretation is in the context of a narrative: a story moving forwards with time. For example, one might recount the history of the man in chronological order, and use this sentence while describing his childhood. However, one could not use this sentence simply to convey the fact that "he lived in London and was employed with BT", because it is some kind of future tense relative to the current point in time being described. There needs to be a current point in time being described before this makes sense.