Just read through this thread, and want to throw in my two cents...
To the OP, either the 4th or the 5th gen will be great. I wouldn't make my decision on which generation to get based soley on the type of 4wd system. They'll each work, and it's just important to know how to drive each (which is easier with the 4th gen because you can use 4hi without any changes in your driving habits).
I was born and raised in the Sierra Nevadas. Driving to Kirkwood has been a weekly habit since I was sixteen. My first car was a cheap little Toyota Celica (fwd) with crappy tires. I was broke and didn't know any better. In foul weather, I just drove slow and carefully, and never had any problems.
When I was eighteen I bought a 4X4 Toyota pickup. I had to get out to lock the hubs. The weather around here is famous for changing very quickly. My pickup was terrible in weather until the hubs were locked. Not knowing any better, I drove it in 4X4 if there was any chance of weather. It never effected anything. I just had to be careful about turning too aggressively on dry pavement or the wheels would skip. Never a problem.
I currently drive a 4th gen 4Runner (V6), and I love it. It is a beast. I love the versatility of the 4X4 system. I'm going to drive this truck until it dies, and when I replace it, it'll be with a new 4Runner (I have an affinity for the trail edition:guitar3

.
The point I'm trying to make it that the 4th gen has a great system, but the 5th gen will work great too, and the 5th gen trail edition is a more off-road capable vehicle. The 5th gen is just a more traditional system. If I had a part-time 4X4, I'd switch into 4WD in any foul weather. No big deal. Some are way over-thinking it. Just don't corner as hard.