Actually the vari lok uses a kind of hydraulic pump to engage its limited slip. When the system, senses a speed difference between the tires it engages a gerotor pump which engages the clutch packs and takes it from an open diff to a limited slip. To understand that you have to know what a gerotor pump is, this is basically what the inside of a gerotor pump looks like, its what's used in a lot of oil pumps and some fuel pumps.:
As the inside part rotates it sucks in oil through the inlet, which in this example, would be on the left side, then as each tooth hits the top of its rotation the inlet ends and the outlet begins. It works almost exactly the same as a rotary (Wankel) engine.
Here is how it works in the jeep, As I understand it. The inside part in the drawing there is connected to one axle, and the outside part is connected to the other, so when one wheel turns faster, the oil flows one way, and when the other turns faster the oil flows the other way, and whichever way it flows it engages the clutch packs to transfer the power to the wheel that's turning slower. Quadra drive also uses the same system in the transfer case to take if from rear wheel drive to 4WD as needed (so its like 4 full time but without the mileage hit) One advantage this system has is that it engages harder the faster the no traction wheel spins as there is more oil pressure when it spins faster, another advantage is that the clutch packs are not preloaded (they don't touch when the system is not engaged) so they last a LOT longer..... So yea, its basically a limited slip, but it will last longer and work much better than a normal clutch type limited slip, in fact according to jeep it can transfer nearly 100% of power to just one wheel....
99 WJ Laredo
2.5" Budget boost, 265/75/16 tires, K&N air filter
1992 YJ 4.0, 5 speed 6", lift 33's
1992 XJ 4.0, auto, 3" lift, 31's
1999 XJ 4.0, auto, 3" lift, 31's
1985 XJ 2.5, 5 speed, no lift, 255/70/15's