Differential
http://auto.howstuffworks.com/differential.htm
The differential has three jobs:
*To aim the engine power at the wheels
*To act as the final gear reduction in the vehicle, slowing the rotational speed of the transmission one final time before it hits the wheels
*To transmit the power to the wheels while allowing them to rotate at different speeds (This is the one that earned the differential its name.)
Why You Need a Differential
Car wheels spin at different speeds, especially when turning. Each wheel travels a different distance through the turn, and the inside wheels travel a shorter distance than the outside wheels. Since speed is equal to the distance traveled divided by the time it takes to go that distance, the wheels that travel a shorter distance travel at a lower speed. Also note that the front wheels travel a different distance than the rear wheels.
[Added text from the reference link - McG]