A limited-slip differential allows both wheels on the axle to provide power to the road when one tire slips. These are most often found on rear wheel drive vehicles because of their inherent problems with traction.
This gives a big advantage in traction when road conditions are slippery, or if the vehicle has a high horsepower engine which causes the tires to slip on acceleration. The drawback to this type of differential is that during cornering when the road is slippery, the rear of the vehicle tends to break loose and fishtail more.
A standard differential has gears, while a limited-slip differential often has clutch discs like an automatic transmission. Gear oil is used for standard differentials, while limited-slip types require oil more like automatic transmission fluid in order to keep the clutch discs in good shape.

