Here's something I wrote years ago that was recently revived on another forum... I thought it might be useful here too.
Q: Why do we need lockers, I thought I had four wheel drive!!??
A: We need lockers for tough terrain because the differentials installed into our front and rear axles have a characteristic that can turn our 4x4 Jeeps into 4x2 Jeeps in tough traction situations.
A factory differential (sometimes called an "open differential") has a characteristic in that when one wheel loses traction, that wheel will start spinning ineffectively. You've seen that happen before, I'm sure. The bigger problem is that one spinning wheel on an axle causes both wheels to lose power to the point you can't move your Jeep... so even though the wheel on the other non-spinning side may have excellent traction, that non-spinning wheel won't receive enough power to keep you moving. Why? Because the differential screws up and only "sends power" to the wheel that is spinning. That is not technically totally accurate but it illustrates the problem very nicely, with a more technically accurate explanation as follows.
So the engine, via the drive shaft and differential, is seeing very little resistance from the axle with the spinning tire. So what? If the engine sees little resistance, it develops little torque. Low resistance to the engine, low developed torque. Lots of resistance to the engine causes it to develop lots of torque. Connect a dynamometer to an engine without a load on it and it'll show very little developed torque. Now put a brake of some kind against the engine output shaft (to add resistance) and the amount of torque developed by the engine will suddenly and dramatically rise. No resistance, very little developed torque... high resistance, a high amount of developed torque.
When a wheel starts spinning, the reduced resistance the engine sees from the axle causes the engine to dramatically reduce the torque it sends to the axle. Here's what else is going on that is a key to understanding this whole thing... a stock factory differential ALWAYS ALWAYS ALWAYS splits the torque it receives from the engine 50:50 to each wheel. Exactly 50-50, every time. So when one wheel is spinning and the engine torque decreases dramatically because of that, the OTHER wheel that still has good traction is seeing 50% of the greatly reduced torque. In fact, the torque sent to the axle is reduced so greatly that when the differential divides it 50-50, there is insufficient torque for the wheel with good traction to keep you moving. This means you're stuck!
So when you're driving on a dry paved road, both tires are receiving equal amounts of power and the high traction they're seeing from the dry road helps the engine to develop maximum torque. Both tires are pushing equally with lots of available torque. Now jack up a wheel (or lift it with a rock on a trail you just drove over) and you're not going to move even though the other tire is still on the ground. The tire in the air is spinning like crazy, causing the torque that axle receives from the engine to go right into the toilet.
So, when one tire on the axle is spinning, you don't have enough power for the other tire to keep you moving. For obvious reasons, all this is a huge problem for a 2wd vehicle (just one axle to drive you). It works exactly the same for a 4x4 but you have one more axle to assist in keeping you moving. But if one tire per axle has poor traction, you are stuck... since one spinning tire per axle is enough to reduce all developed torque from the engine down below the point the Jeep needs to move forward.
OK, we know what the problem is now, what's the fix? One, you could STEP ON THE BRAKES a little... which would stop the tire(s) from spinning so more torque would be developed, which should be enough for the OTHER tire that still has good traction to get you moving again. Stepping on the brakes forces the engine to work harder so it develops more torque which is sent to the wheels... so that gets more torque sent to the wheel (both actually) that still has traction so you may be able to get unstuck. Yes, stepping on the brakes (to a point best learned by practice) works rather well in these situations. Just about all drivers used to know that technique when few roads were paved... but it's just about a lost art now.
So what does a locker do? It mechanically LOCKS the left and right wheel together to overcome the above problems. It won't allow one wheel to start spinning while the other sits doing nothing. The left and right wheels are mechanically locked together.
Automatic lockers keep the left and right sides locked together except when you turn left or right, where it will automatically unlock the outside wheel during the turn until after the turn is completed at which time it locks up again. When the locker unlocks for a turn, the outside wheel is allowed to rotate faster than the inside wheel so it doesn't hop and skip during the turn. The inside wheel is driving during a turn with an automatic locker-equipped vehicle. The locker automatically locks again once both wheels are turning at the same RPMs again.
The problem with an automatic locker is that most are not very street friendly when installed in the rear axle. Because they keep the left and right wheels locked together except when forced to unlock for a turn, they can cause unusual handling characteristics like rear-end waggle, tire chirping, disconcerting loud bangs and snaps from the locker, and even sideways sliding down slippery off-camber slopes where they earned the nickname "low-side finder"... which can sometimes produce a high 'pucker-factor' at times. For offroading however, locker's negatives are far outweighed by their benefits in challenging conditions.
But in many Jeeps like the TJ, an automatic locker is fine when installed in the front axle. Since the front axle doesn't receive torque in 2wd, a front automatic locker unlocks easily enough for turns that you may not even notice its presence. Only in 4x4 is the front axle receiving torque which makes it harder for the locker to unlock for turns. About the only conditions where an automatic front locker would not be good in the type of 4x4 system a Wrangler TJ has would be on icy or snow-covered roads where you need 4x4. In 4x4, a front automatic locker would cause understeer (make the Jeep want to drive straight in a turn) which would not be good if the road was slick from snow or ice.
A manual locker is "open" (unlocked) until you actuate it. The ARB Air Locker and the cable-actuated Ox-Locker are examples of manual lockers. These are good because they remain unlocked until you choose to lock them. This eliminates the handling problems automatic lockers have on the streets.
By the way, a locker is installed inside the differential and it replaces the "spider" gears that make a differential work they way it does.
So some Jeepers add lockers in the rear, others add them to the front. I happen to think locking the rear axle first does the most good, but I have installed automatic lockers into both of my axles... which works pretty darned well. But if your rear axle is the notoriously weak Dana 35c that comes stock on all Wranglers except the Rubicon and Unlimited, avoid installing a locker in the rear axle and install it in the front axle instead. Since the front axle rarely receives more than 50% of the torque that the rear axle does, it can usually handle a locker without problem with reasonably sized tires. But if your rear axle is the optional and far stronger Dana 44, by all means install a locker into it if your trails are tough enough to make a locker desirable.
So what's a limited slip differential? First, it is not the same as a locker. It is more or less an automatic brake for the spinning tire... it performs kind of like when you use the step-on-the-brakes technique so the spinning side gets coupled to the non-spinning side for more resistance so more engine torque can be generated so the non-spinning tire receives more torque from the engine to help get you moving again. It operates as a brake somewhat by coupling the added resistance of the side with more traction/resistance to the side that has less traction/resistance. A LSD depends on some tire spin to get it working so it's not as efficient for challenging terrain as a locker is. But then generally speaking, a LSD is far more "driver friendly" on the streets, which is why we all don't just have lockers in our Jeeps.
Hope this helps a little.