Since there is some confusion about ATRAC, center diff lock, and when to lock, here is an excerpt from what i wrote on my forum about 4runner's system: (applies to 2000-up TLC with ATRAC and VSC)
To LOCK the center differential (thus, TRUE 50/50 power split between front and rear axle), you need to push the button to the left of the steering wheel on dash. This should be done only on loose terrain (because of 50/50 split) to prevent binding of the center differential. Again, this will disable the VSC (stability control), allowing you to power through mud (which you cannot do effectively if VSC is ON).
When off-roading in rough terrain or mud, you need to LOCK the center diff because it turns OFF VSC. Because, if you are stuck in mud, VSC may interpret your attempts to get out as oversteer/understeer (especially if you are sliding back and forth). Therefore, it WILL cut power (dethrottle). With VSC off, ATRAC can function with full engine power to get you out. Thus, you can spin all four wheels! I have seen this on my brother's Lexus LX470 and Discovery. THAT IS WHY YOU LOCK THE CENTER DIFF, among other reasons!
In reality, the MAIN reason most people LOCK the center diff in the 4Runner is to turn OFF VSC. Very few off-roaders (esp. beginners) will ever see the need of the true 50/50% split. An example is if BOTH your front (or rear) wheels or 3 wheels are in mud (no traction)...in which case, locking the center diff is a good thing because it allows 50% of power to be routed to the AXLE that still has the wheel(s) with traction. Without the center diff LOCK, 100% power will be routed to the axle that has both wheels slipping (thus, you are stuck)...even if you have your truck in 4wd.
If you want to learn more, then here is the thread:
http://www.toyota-4runner.org/showthread.php?threadid=12
You just have to shift through some 4runner stuff. ATRAC is pretty cool techno-wizardry.
Summary from above (if you're too lazy to read the whole thing):
1. Lock center diff when off-roading. A must IMO.
2. If you're stuck in mud or sand or need to climb a muddy hill, then you need to rev your engine past about 2500-3000 rpms to prevent (or hope to prevent) ATRAC from slowing you down. This is IMPORTANT because very few people know this.
3. ATRAC = Limited-slip differential in effectiveness.
4. Should be in 4-LO over technical terrain to provide more control & power AND to prevent destroying the terrain (tread lightly!).
5. UNlock your center diff when you go back ON-road.
6. VSC is good for on-road...bad for off-road.
7. Locking center diff does NOT turn off ATRAC.
Hope this helps.