OK, let me do my best here
Every day, your 4runner is a type of all wheel drive. what this means is on dry roads, power is going to all 4 wheels, but each diff (front, rear, and center) is equalizing the loads from each wheel and each axle, resulting in normal performance. if for any reason one wheel spins, all power will be transferred to that wheel, resulting in a loss of traction and forward (or reverse) progress.
when you engage the center diff lock, you are turning your AWD system into a traditional 4 wheel drive system, like the one i have in my 4runner. this center diff lock locks out the center diff, effectively linking the front and rear drive shafts together. if you lose traction on the front axle, all the power going to the front axle will go to the wheel with no traction, BUT, the rear axle will still get the same amount of power.
similarly, with a locked rear axle for example, power will go to the wheel with least traction, but with a axle diff lock, power will be split equally between the wheels.
I think this should help you understand how it works:
http://auto.howstuffworks.com/differential.htm
Now, that being said, here is what you REALLY need to know
Street: High range and center diff unlocked
Dirt road: high range and center diff locked
rocks: low range and center diff locked.
basically toyota added the center diff to allow it to be all wheel drive for the street. they added the locker to still be capable offroad.