NOTE: I did not write this, in fact I stole it from SUBBE55 who is an utter genius.
Drivetrain
Transmissions & Gearsets
The first and foremost part of the drivetrain is the transmission. This key assembly hosts several very important parts including but not limited to the front differential, the center differential (located at the rear of the unit just ahead of the tail shaft), and the complex geartrain.
*5-Speed Manual
*6-Speed Heavy-Duty Manual,
*4-Speed Manual
*4-Speed Automatic
*4-Speed Automatic with Sportshift
*5-Speed Automatic with Sportshift.
*3-Speed Automatic
*3-Speed Manual
*NEW 6-Speed Automatic
*NEW 7-Speed Automatic
5MT
Automatic Transmission
Though the each manual or automatic transmission has a good deal of similarities to the others of it’s type (ex. 5MT and 6MT), the automatic and manual types in themselves vary greatly from each other in both components and how they function.
Differentials & Electronic Input 
Differentials are a very important part of any drivetrain. They are the components that move power between the transmission and axle shafts, changing the direction of power and final gear reduction (through the ring and pinion gears as seen below.) These aspects all help to give you the proper power balance to keep the vehicle under control. While 2WD cars use a single differential to transmit power to two axles, Subaru’s and other AWD cars require three; the center, which transfers power fore and aft from the transmission to front and rear units which transfer power side to side. However, not all differential types are created equal as each is tailored to a specific type of driving and set of conditions.
There are a number of types of differentials applicable to the Subaru drivetrain with two main categories: Open and Limited-Slip. The main difference being limited-slip units maximize traction by sending torque to the wheels with the most traction which they essentially lock while still allowing a variation in speed for turning. Limited Slip differentials comprise of several different designs including, but not limited to: Viscous Coupling, Torsen, Clutch Type, and Electronically Controlled units. One main thing to keep in mind is the size of the rear differential however, as most general road applications use an R160 (160mm ring gear), if more power is desired and especially if an STi 6-speed manual transmission is being installed, an R180 sized rear differential with associating shafts and hubs is nearly a must to keep reliability in check. An R200 size is available but is only required for the absolute highest output race machines.
Open: 
This is the most common type of differential used for it’s relatively low cost, lighter weight, and generally predictable vehicle dynamics. This type of differential is used in the front differential in nearly all Subaru’s other than more recent STi models. It is also still used in many of the lower level models for the rear unit as well. This type of differential distributes power fairly evenly to both wheels in a straight line, but when one wheel starts to slip, power follows the path of least resistance, which is unfortunately the slipping wheel. This type of differential is therefore NOT considered a Limited Slip Differential. It is not considered optimal for racing and frequent driving on low traction surfaces though adequate for most transient driving conditions.
Torsen (TORque SENsing): The Torsen differentials (also known as Helical differentials because of one of the main components- helical cut gears, also known as worm gears) are a mechanical type of differential, no clutches, fluids, or electronic controls involved. This type of differential is excellent because it has nothing to wear out and does not wait for the loss of traction to take effect. Torsion units use a pair of helical cut gears that work like an open differential when power is equal. When a difference in traction is sensed, the helical gears go to work and bind together sending a predetermined amount of torque to the wheel with more traction. The torque bias is predetermined by the design of the helical cut. The only drawback of this type of differential is that when one wheel or set of wheels looses traction, the torque bias defaults to zero torque transfer. A simple remedy of tapping the brake while staying on the throttle produces enough of a level of traction that shifts power to the wheel with traction. Despite this small and less than likely occurrence for most drivers, this is the preferred type of differential for many drivers and some manufacturers due to it’s fast acting characteristics, safe and predictable handling, and it’s very positive ability to reduce torque steer. Audi’s Quattro system has used this type of differential for several years (though information points to just as the center differential lately with Electronic or some other forum of LSDs front and rear) because it works well with ABS sensors, it allows power to move smoothly until things get tricky, and then sends power to where it’s needed most. The Quaife ATB (Anti-Torque Biasing) units are probably the most well known, though STi also sells Helical units and others are available as well.

For more info on this type of unit, consult the Quaife America website.
Viscous Coupling:
This type of differential is used in most of Subaru’s performance-oriented vehicles (RS’s, GT’s, WRX’s, etc.) in the rear location, while being used in the center location for nearly all late model Subaru models. Viscous coupling differentials have the ability to better transfer power to the ground in situations where wheel slip occurs versus open style differentials while still being cost effective.
How does this work? The viscous coupling units use two sets of plates close together that are surrounded by a thick fluid. When one set of plates starts turning faster than the other (one wheel or set may be slipping), the thick fluid in the differential heats up and brings both sets of plates to the same speed essentially locking them together. The only drawback is that this system doesn’t kick in until wheels actually start spinning at varied speeds (greater than just a normal turn) while some other units start working when a difference in torque is detected.
Clutch-Type:
This type of differential works similar to the open differential design in normal driving, as do most of these types of limited-slip differentials. However, as viscous units use fluid and torsen units use mechanical gears to essentially lock two output shafts or bias them to a given ratio, this system uses clutch packs as seen in the image above. These clutch packs are made up of alternating friction discs (splined to the back side of the Side Gear) and friction plates (splined to the differential case.) These two clutch packs (one per each axle) reside between the end of the case and a cast pressure ring (which rotates with the case it’s splined to), which essentially butts up to the side gear.

When one axle spins, slower than the rotating case, the pinion shaft shown in the middle (looks like a 4-way) rotates against the V-grooves of the pressure ring putting increased pressure back on the plates causing them to lock when enough pressure is applied. A spring plate and disc is generally used on each side to lessen the impact when the two plates do lock. To gain the desired results, plates and discs of varying thickness can be combined for desired locking results.
This type of differential needs to be picked extremely carefully as it can potentially have very undesirable results. In many (not all) instances, understeer becomes more prevalent as both wheels are trying very hard to spin at the same speed, thus the car will want to push straight no matter how much the driver tries turning. This type of differential is generally favorable more on low traction surfaces such as gravel and snow where equal power to the ground through both axles may be desired. With the right setup though, such as the Suretrac design found on WRX STi’s, a good balance can be found for street/tarmac applications.
Dynamic Stability Programs: For the automatic transmission enabled vehicles, they use a combination of VDC (Vehicle Dynamic Control), VTD (Variable Torque Distribution), and ATS (Active Torque Split) additional to the already present Viscous Center Differentials. These systems are all controlled with the center differential located within the transmission case.
VDC- takes input from an array of sensors about data including vehicle speed, engine speed, steering wheel angle, gear, and brake status to constantly monitor the conditions and to try and alleviate a potential danger before the car gets out of hand. Several who have tried this system have said it isn’t geared as much for sport as it is for safety, which is good for the average driver, but not the enthusiast.
ATS- has been around since the early 1980’s in Subaru automatic transmissions. This simple setup though similar to VDC just senses power at the axles, gear selection, accelerator position, and vehicle speed without the vehicle dynamics included in the VDC setup. This system takes all the data and calculates how much power to send fore and aft for optimal safe results. In basic terms it automatically transfers power from the wheels that slip to the wheels that grip.’
VTD- is a slightly sportier tune of the ATS system allowing more power (up to a 36:64 F:R torque split) to the rear wheels or up to a 50:50 ratio depending on driving conditions. Some of the best information and diagram sources:
Clutches & Flywheels
first is the dual-mass flywheel setup which is designed to reduce jerkiness and noise, and make everyday driving easier. For those who want something a bit more, lightweight flywheels are available, though it is recommended purchasing one at least 12lbs or greater as lower a weight unit may make drivability suffer. Lightweight units allow the engine to rev up faster, increasing performance. Of the current designs available, Chrome-Moly fabricated units appear to have the optimal strength with the ability to be lightweight as well.
Upgrading power in AWD cars puts an even greater stress load on transmission, and since power is being transmitted to a minimum of 2 wheels (up to 4) in 2 different directions through the transmission case, many recommend keeping the stock clutch, or some type of aftermarket full face clutch with less than 50% greater holding power over stock. 3-Paddle style clutches (a.k.a. 3-puck/button) aren’t recommended for street applications as they tend to shutter and are more abusive to transmissions, particularly in ample-traction environments.
Clutch Types
Hardened Mounts & Bushings
These components are designed to reduce driveline and engine movements to transmit power more effectively to the ground, though there will be a noticable increase in NVH with many of these mounts.