What is all-wheel drive and how does it differ from 4-wheel drive?

Below is a link to Motor Trend that explains all the technologies available today.

All wheel drive- 3 differentials, one front, one back, one middle.

Four wheel drive - 2 Differentials. One front, one back.

So what does this mean in real life?

Lets say you have a four-wheel drive car and your going through some deep puddles. Your front tires have 50% power and your rear tires have 50% power. They will both always have 50% power to allocate, if one set of tires lose traction from the ground, then less than 100% power will be transferred to the ground, but no set of tires will EVER have more than 50% engine power in Four wheel drive. So back to the puddle, lets say you're driving through and your front tires encounter the puddle and lose traction. You are now relying on the 50% engine power the rear wheels have to move you as the front tires are useless as they have no traction.

With all-wheel drive, it's a bit different. Now even just ONE tire can have 100% engine power, because the middle differential can split the power to where traction is, so now you can allocate that engine power anywhere at any time, both sets of tires have the capability of having 100%. So lets say you're going through the same puddle, your front tires lose traction with the ground and become useles, the middle differential will stop sending engine power to the front tires because it senses the loss of traction, and isntead uses 100% engine power all to the rear wheels, so with all wheel drive you are now relying on the rear wheels with 100% power to move you instead of the 50% in four wheel drive.

In short; All-wheel drive is always better.

Also, there is no car that I know of that can completely dissable it's 4/AWD system totally, but there are cars like the Subaru Impreza WRX STi that can instead split the engine power 70/30 (70% rear, 30% front) isntead of the standard 50/50. I dont believe there is a "term" for it, it's just how some all-wheel drive systems are made to work. When you go buy a car, ask if a certain car's all wheel drive system functions in the way you want it to, some cars do have front-wheel bias or can be programmed to.