Just here to plug this guys video on diff drops - I never really understood how it affected suspension travel. He gives some really great demonstrations to explain in detail the trade offs.
In another one of
Tinkerer's videos, he states that the LC100/LX470 requires a diff drop, according to Ironman 4x4's chief engineer. He doesn't do any actual testing of this, however. He goes on to say, Ironman offers diff drops for models that don't need them, simply because there is a demand for it. Would be cool if someone could do a similar test that he performed on his FJ or Tundra. Or if someone wants to lend him their LC/LX. He's somewhere in PA.
In an ideal world where they are needed, they just drop the differential x inches so that the CV axle can function properly when the front wheels are at full articulation after a lift. The drawback is that you lose the ground clearance that you gained with the lift, which kind of defeats the point. I would assume you still gain some approach and departure angle, but your diff will be roughly back to the OEM position.
In an IFS, more lift doesn't equal more tire. Wheel offset/scrub radius, tire width, and wheel-well clearance are what determine what size tire you can fit. The more I read about lifts, the less necessary they seem unless you're adding big weight to the vehicle. You can just get more ground clearance with bigger tires.
I'm definitely not an expert and have no real world experience, but this is what I've learned from reading this forum and watching Tinkerer's videos. After watching the video you've linked, I often wonder why no one in the aftermarket sells a wheel that matches the specs of the TRD Rock Warrior wheel. It seems like its the perfect choice for 5x150 bolt pattern vehicles, demand is high enough on rock warriors... why don't they exist?