Display out of stock options of Configurable products, depending on 'Show out of stock' system configuration setting.

observer.php

<?php
  /**
   * Check if out of stock options of configurable products should be displayed
   */
  public function checkDisplayOutOfStockOptions()
  {
      $currentProduct = Mage::registry('current_product');
  
      if ($currentProduct && $currentProduct->isConfigurable()) {
          if (Mage::getStoreConfigFlag(Mage_CatalogInventory_Helper_Data::XML_PATH_SHOW_OUT_OF_STOCK)) {
              Mage::helper('catalog/product')->setSkipSaleableCheck(true);
          }
      }
  }

observer.xml

<controller_action_layout_render_before_catalog_product_view>
    <observers>
        <your_module_observer_name>
            <class>Your_Module_Model_Observer</class>
            <method>checkDisplayOutOfStockOptions</method>
        </your_module_observer_name>
    </observers>
</controller_action_layout_render_before_catalog_product_view>
<controller_action_layout_render_before_checkout_cart_configure>
    <observers>
        <your_module_observer_name>
            <class>Your_Module_Model_Observer</class>
            <method>checkDisplayOutOfStockOptions</method>
        </your_module_observer_name>
    </observers>
</controller_action_layout_render_before_checkout_cart_configure>