For pure off-roading, the rear locker is better...the harder the terrain, the more the locker will separate itself from ATRAC. There is no substitute for a locker off-road. No contest.
For general off-roading (camping, mild off-roading) and all-season (all-weather) use, ATRAC is superior. With ATRAC, you also have a superior ABS system (4-channel vs. 3-channel), rear disc brakes (4th gen only), EBD, and Brake Assist. The latter points are especially important when you talk about on-road safety.
As a 4th gen owner, you can always argue this...you canNOT add ATRAC to a 3rd gen 4runner with rear locker, BUT you can indeed add a rear locker (ARB for example) to a 4th gen 4runner with ATRAC. Or you can simply get the 2009 4runner Trail Edition and have the best of both worlds instantly from the factory.
Therefore, the rear (+/- front) locker can be added to a 4th gen 4runner...so, the lack of a rear locker can easily be fixed by aftermarket parts (or getting a 2009 TE). But ATRAC (and the other safety benefits that come with it) canNOT be added to a 3rd gen 4runner (prior to 2001)...in other words, ATRAC cannot be retrofitted to an older vehicle that came without it from factory.