This is by far the most common transmission setup found on 4x4 vehicles. For normal road use power is transmitted to the rear axle only, thus giving two wheel drive. For off road use this has very little advantage, so there is an extra gear lever to engage 4wd, ie drive to the front axle.

There is a snag to this system however, and this can be found in the axle differentials that are fitted to all wheeled vehicles. Differentials are devices that allow each wheel to turn at different speeds, to alow vehicles to turn corners and prevent transmission 'wind-up' on hard surfaces. For off road use the differential is a bit of a disadvantage however, as when a wheel looses traction off-road the differential lets the power escape via the easiest route, i.e. the wheel with the least traction. This means the wheel that has grip gets no power. However if the other axle still has traction and the vehicle is in 4wd then the power from the axle with traction should be enough to keep the vehicle moving. In other words even with 4wd you can only afford to loose traction to one wheel at a time without becoming stuck.
You shuld never drive a part time 4wd vehicle in 4wd on a road as the front and rear axles will drive at different speeds and 'wind-up' the transmission resulting in difficulty in turning and transmission damage.

• Full Time Four Wheel Drive

As their name suggests, full-time 4x4 systems constantly provide power to both axles in all conditions. To prevent the transmission from becoming wound up as discussed above, a third differential is fitted to the gearbox to allow each axle to rotate at its own speed as the vehicle travels around corners on the road. This is because the front axle has to travel further round a corner than the rear, hence the front axle needs to be able to travel faster than the rear.
Once off road we experience the same problem with the axle differentials as the part time system, except this time there is an additional problem to overcome. The third differential in the gearbox. For example if the gearbox differential is left open, a vehicle which is supposed to be permanent 4wd can end up being one wheel drive if one wheel looses traction.
To overcome this, vehicles with permanent 4wd feature a centre differential lock which effectively prevents the gearbox differential from working, creating a solid link which transmits power to both the front and rear axles. Thus creating a similar setup to the part time 4wd system for off road use.