It is that "pumpkin" thing that you see hanging down from a cars axle in the middle. it basically lets one wheel slip a little bit while still driving the wheel. Think about running around a track. The kid on the outside has to run faster than the kid on the inside to stay parallel to him. Same thing for a live axle. The outside wheel on a turn has to spin faster than the inside wheel. If its just a live axle, it will be harder to turn, you will have more tire wear, and you could even get some hopping. But for offroad you usually dont notice as the wheels slip a bit on the dirt.