When the vehicle senses that one wheel is spinning and the other isn't (tire in the air, for example), it quits giving all of the power to the wheel without traction, and engages the wheel that isn't spinning. It isn't a true locker, forcing both wheels to spin at the same time, but situational. It's good in some situations, but for most 4WD applications, a locker is best.

I have Limited Slip in mine, and it has helped some, but I'm looking to get a front Aussie locker in addition. I'm just waiting for someone to buy my stock tires before I purchase it.

 

The Track-lock limited slip uses clutch packs in the differential to provide additional friction when one axle shaft spins faster than the other. The clutch pack tries to keep both axle shafts spinning at the same rate as the differential case. It typically does OK in mud, but not so good on rocks. It can't apply 100% power to the wheel with traction like a locker can. Some limited slips (Auburn & Detroit Trutrack) use gears to achieve similar results to clutch packs.