LIMITED SLIP DIFFERENTIAL: Limited slip differential (LSD) is a mechanical version of traction control, limiting wheel spin.
A differential has three jobs: to aim engine power at the wheels; to act as the final gear reduction, slowing the rotational speed of the transmission one final time before it hits the wheels; to transmit the power to the wheels while allowing them to rotate at different speeds.
Here's a little trick to demonstrate traction control. In a rear-wheel drive car, of course, put the two rear wheels on different surfaces (one on ice and the other on a dry pavement, for example). The wheel on ice spins. So, try partially applying the handbrake. The spinning wheel will slow down and the extra torque needed to overcome the handbrake will be transferred to other wheel with more traction.