All-wheel drive: These systems are generally non-driver selectable and do not have a transfer case low-range gear. Actually, there are two different types of AWD: Full-time, where the vehicle is always driving both the front and rear wheels, and on-demand AWD, where power to all four wheels is only being provided when traction is needed. But let's back up a minute and go over the purpose of AWD. Generally, it's intended primarily for on-highway use where weather or traction conditions require four-wheel drive, but it works also as well during dry highway driving conditions. Some performance cars also have AWD as an aid to traction.
Full time AWD: This is the simplest of these systems. The transfer case delivers driving power to both the rear and front tires at a split ratio of about 70/30 under normal operating conditions. However, depending on the traction conditions, as much as 100 percent of the power can be sent to the front or rear tires as needed. A viscous coupling within the transfer case allows this to happen. Actually, this is a pretty trick but simple item. Take a sealed housing and put a couple of plates in it, and fill it with special viscous fluid. One plate is connected to the front driveshaft, the other to the rear driveshaft. Under normal driving conditions, the fluid and the plates turn at the same speed. When, say, the rear wheels start spinning faster than the front wheels, the fluid heats up and becomes more solid, so it grabs the front plate, which is spinning at a slower speed and provides more torque to the front wheels. The bad part of this system is that a wheel has to be spinning before power is transmitted. Actually, the system is a lot more complicated and is made up of multiple plates, but hopefully you get the idea.
Some AWD systems use what is referred to as an "open-type" planetary gearset to accomplish this same thing. This is nothing more than a compact gearbox that allows a variation in speeds. It is similar in operation to say a Detroit True-trac differential.
There is another similar system that is between full-time four-wheel and all-wheel drive. There is a floor-mounted manual shifter for the transfer case that uses a viscous coupling instead of electronically controlled clutch packs. This allows the vehicle to be driven on hard surfaces when in four-wheel drive but also allows for two-wheel drive mode (2-Hi) as well as 4-Hi and 4-Lo modes.
On-demand AWD: With this type of system, torque is only delivered to the slipping tires when the computer is told that one driveshaft's speed is greater than the other driveshaft's speed. Otherwise, full torque is delivered to the primary drive axle, which can be either the front or the rear axle depending on the manufacturer's initial design. When one shaft starts spinning faster than the other, the computer reads these input signals and actuates a clutch pack or, in some cases, a viscous coupling to send as much as 100 percent of the torque to the axle with traction.
Automatic transfer cases: The last system on our list in reality is a combination of all the above. These are usually shifted by an electric motor controlled by a switch on the dash. There's a 2-Hi mode, where power only goes to the rear axle, and an Auto four-wheel drive (sometimes only labeled "Auto"). In this mode, one can drive in four-wheel drive on a hard-surface road. Power is sent generally only to the rear axle. Wheel speed sensors monitor each wheel's speed, and when slippage is detected by the control module, a signal is sent to the transfer case to apply clutch pressure that in turn sends power to the front axle. A computer program determines how much power is needed to be sent for the condition. In the 4-Hi or 4-Lo settings, it works just like a part-time system, and both axles are locked together.
I'm sure I may have missed a couple of different operating systems or could have gone into more detail on the operation of the ones I did list, but this should give you a better understanding of the different systems available and their operation.