Could someone please enlighten me on the "real world" difference between the differentials of the 5th gen LTD and the TE/SR5. What about the 4th gen and 5th gen differentials. Thanks.
"Torsen" is short for Torque Sensing, meaning that the shaft getting better traction shows as more torque, which then results in even more power being fed to the shaft with traction. Specifically in the current 4Runner, the type of Torsen used in between the front and rear drive shafts employs planetary gearing in a ratio that supplies more power to the rear wheels than to the front, until such time as the front wheels gain more torque than the rear and the Torsen sends more power to the front wheels.
The TE/SR5 have "transfer cases" that split the power in a static ratio regardless of torque or traction. Wheels with no traction simply get the brake applied to it via the traction control, while the other wheel remains turning under power.
In the real world, this means that a Torsen center differential provides you will fulltime 4WD, and it will determine not only which wheels get power, but when and how much, too. If you find your rear wheels have lost traction (say in mud or loose gravel or snow), your front wheels will get more of the power without you even knowing it happened. A TE/SR5 driver would have to manually select 4WD to provide power to the front wheels.
Obviously, some prefer the Torsen for convenience but to me it felt heavy and sluggish in low speed driving and parking. That may have been due to the transmission TSB issue, or not. I'm used to rear wheel drive so I stuck with the old school part-time system.
Regarding the locking rear differential of the TE... they are great to have when you need them, but if you have never used one before, you probably won't use it in the future, either. In simple terms, a locking diff forces both wheels to spin at the same speed.