Sorry 'bout that confusing reply - more
I didn't address the fundamental difference between AWD and 4WD. This isn't a Ford specific issue, but brings a couple of Ford-specifi elements into play.
AWD = All Wheel Drive, where the transfer case is permanently distributing torque to both the front and rear differentials at all times.
Torque biasing means that more or less power can be directed to the front or rear differentials depending on where the traction is. There is a differential in the transfer case that distributes the power to the differential with the least traction (to allow smooth turns) but with a traction device to limit the slip, so eventually both axles get power.
Old Toyota Landcruisers have a very cool feature that lets you push-button lock all 3 differentials - front, middle, and rear. I hear the new Mercedes G500 has that feature as well. Both the Toyota and Mercedes are true 4 wheel drives with lo-range, however.
In the case of the Explorer, there is no low range, clarifiying the distinction made between 4WD (traditional two-range transfer case) and AWD (both axles powered).
The single-speed transfer cases found in many of the car-based SUV's have this same limitation. Actually, many mid-size SUV's (e.g. Bravada) have this limitation.
The 4WD ControlTrac transfer case available on the Ex's, along with the 5-spd auto, are slick. The case uses a magnetic clutch, kind of like the AC compressor clutch, that's computer controlled. When the computer gets data from the ABS sensors that there's excessive wheelslip (snow, rain, whatever) front to rear, the clutch starts feeding power to the front differential.
This does an amazing job of simulating All Wheel Drive functionality without the weight and complexity of another diferential unit. It also allows an instant shift to 4-hi with a simple switch, which is *very* useful in snow. To me, snow (vs. rain) is where I would be really irritated with the AWD on the Explorer - no center differential lock.
Land Rover took their CDL off the 2002 Discos and people screamed so loudly they came out with a dealer installed option to get it back working ($350!). An AWD torque-biasing system (viscous coupling, whatever), allows a certain amount of slip front to rear (has to, otherwise your front tires would hop in a turn). It's kind of like the difference between a limited slip rear end and a selectable full locker. The lack of a solid connection front-to-rear in AWD is undesireable in my opinion.
With 4WD, locking the front and rear differentials through the case means you will have at least two wheels going the same speed through the snow. Hopefully your paved streets won't have snow deep enough to appreciate the distinction, but we play around in stuff like that all the time (we don't live in it, just visit).
For traditional low speed off-pavement use, it's got an electric servo motor to switch between hi-range and lo-range (just like a normal electric case). You'll hear a "chunk" when it goes into low, nothing to worry about.
One of the points made by Ford with the latest Ex is the upgrade in computing power, including a quicker-reacting transfer case.
The new Ex's have a much more sophisticated drivetrain and suspension; they have amazing amounts of room; they come standard with limited slip rear ends (big deal, but get the tow package anyway for the trans cooler); the great 4WD system and 5-spd auto are now available with the V8. There's even an off-road package (?? whatever) with skid plates etc. The only thing I'd have to change is the street tires, same as any other truck out there except for the H2 (BFG AT KO's are standard).
I am old school inclined myself; my Ranger has manual everything (including hubs) except for power brakes and an electric shift transfer case. I'm shopping the salvage yards for a manual case right now. My wife drives the Ex mostly, on or off road, and learned to drive on a 65 FJ-40 (WAY WAY manual old school agrarian) - she loves her Ex. We get past our automatic phobia by left-foot braking, and it is easier to drive in traffic with an auto.
Have fun,
Brian in CA