Your truck is NOT AWD if it is a V6 with the 4wd selector. The AWD is only on the V8 AWD models - they do not have any selector switches. Your 4wd has a traditional transfer case and when set to AUTO it runs in rear 2wd. A computer monitors the signals from the ABS speed sensors in the front wheel hubs and rear differential housing. If a difference in speeds is detected, the truck powers the electronic actuator in the transfer case to provide power to the front drive shaft. Since the shaft is live all the time, you generally don't notice the switch unless there is severe slip (such as rear wheels spinning at take off from a stop - then you may feel a thud as power is suddenly applied). For the majority of driving conditions this setting works perfectly fine. Do not use the 4Hi and 4Low settings unless you are offroad or in very slick conditions such as deep snow. The 4Hi and 4Low settings manually lock the transfer case at 50/50 power resulting in binding of the drivetrain if you turn while on any surface that has good traction, which can cause damage to the truck and may cause you to loose control of the vehicle. 4Hi is best for wet snowy or sandy dirt roads, 4Lo locks the transmission in the lowest gear and is useful for rock crawling, steep hillsides, and mud holes where you need the maximum power to all wheels to keep the truck moving forward.
