In my time as a licensed driver, I've always had at least one 4-wheel drive vehicle (meaning, in this case, RWD, with a 2-speed transfer case to engage the front axle).
The first was a 1991 Isuzu Trooper that required you to stop, shift into neutral, and shift the transfer case into either 4HI or 4LO. To disengage, you had to stop, shift into neutral, pull the t-case back to 2HI, and then back up for about 20-30 feet to release the front hubs.
Kind of a pain in the ass.
The next two were both shift-on-the-fly capable ('94 S10 Blazer, '03 Ram 1500), which was a breeze compared to the relatively complicated Trooper. No stopping, no shifting to neutral, no backing up. Of course, 4LO still required a stop/neutral cycle, but that was no big deal as it was used so infrequently.
I didn't think a 4WD system could be anymore easy to use until we bought our 2004 GMC Envoy and I was introduced to the "A4WD" setting.
The Envoy (and most of its other GMT360 brethren) used a 4L60E 4-speed automatic connected to a New Venture Gear 226 2-speed electronic transfer case. This t-case, like most others of the era, was shift-on-the-fly capable from 2HI to 4HI and back. So far, nothing groundbreaking.
What set this case apart from others that I had previously experienced was the aforementioned "A4WD" setting. This setting aims to fill in that gray area in which you might need 4WD one minute, and be on dry pavement the next.
Here's how it works:
In A4WD, the front differential engages and back drives the front driveshaft. The front drive end of the t-case is not engaged, however, so there is no solid connection between front and rear axles. This allows the driver to corner on high-traction surfaces without experiencing driveline binding.
When the system detects a difference in rotation speed between the front and rear driveshafts (caused by rear wheel slip), a dry, multi-plate clutch in the t-case engages the front drive shaft, splitting power between the front and rear axles. Once rear-wheel slip is no longer detected, the system releases and it's back to 2WD.
This is incredibly useful in situations like the beginning or end of a snowstorm, when there are slippery areas, but not all surfaces are covered.
There are, however, a few disadvantages of this setting. First is that it takes slightly more effort for the vehicle to drive around spinning the front driveshaft and t-case, so fuel economy takes a small hit. Second, since the system engages once the rear wheels are slipping and the RPMs are up, there is a bit of a shock load that, over time, will cause wear and tear.
That being said, our Envoy is 11 years old with a hair over 100k miles and the system still works like a charm.
A little poking around has shown me that a good number of manufacturers offer this type of feature now, but what surprises me is that it doesn't seem to get much press. I don't see it hyped in ads, I don't recall hearing much, if anything about it in car magazines, and I don't really hear anybody talk about it. Maybe it's just taken for granted.
Anyhow, if you made it this far, congratulations. You must not have anything better to do!