Diablo, your tranny, the auto 4 speed:
1,2,D,OD = 1,2,3,4 like in a 4 speed manual (with 4th having a reduced ratio for hwy economy). OD is the normal everyday setting. I switch out of OD sometimes to engine brake, downshift for highway passing, or to keep the tranny from shifting a lot in high stress situations.
You'd put the selector in 1 or 2 for situations where you need low end power and engine braking (mountain driving), or offroading. Keeping the tranny in first while offroading will keep your revs up and make sure you have power when you need it, it will also help you idle over obstacles.
Use 4wd when offroading and you think you might lose traction or need the additional pull of the front wheels to get over something.
4 wheel low adds added reduction to the gearing, giving you more power, usually about 4:1. In 4w hi, the transfer case has a 1:1 ratio (the tranny and your rearend then determine the driveline ratio). You basically use 4w-lo for rock crawling.
does that help?