Here's a description to accompany the illustration on how the outside wheel is allowed rotate faster during cornering, tried finding something more technical, still pretty clear. What I take from this (I'm sure someone will correct me if I'm wrong) is that it will behave as an open differential until the output torque is less than the input ie loss of traction, then it applies torque to the output shaft that requires it, which goes to explain the compatibility with braking from ABS and traction control, the side gears (purple) planet gears (gold) above.
"When the differential housing rotates, the planet gears are rotated around the output side gears. Thus, force is being applied from a planet gear to a side gear. As described above, no relative motion can occur between these two gears because they lock up solid. This means that full force is being applied from the differential housing to the output shaft. This occurs regardless of whether or not the other output shaft has any load (traction).
When the car goes around a corner and one wheel needs to go faster, the force from the faster outer wheel goes *into* the differential through the output gear. Now we have a situation where a force is being applied from a side gear to a planet gear. Relative motion between these two gears is allowed when the force is in this direction.
To summarize the two main characteristics in a different way: Forces between the housing and an output shaft (engine power to a wheel) are directly coupled. Forces between two output shafts (differences in speed between the two wheels) allow the internal gears to rotate.
The real beauty of this design is that these two characteristics are autonomous. Both things can be happening at the same time. Full power can be applied while going around a corner. The wheels are allowed to turn at independent speeds. Full torque can be applied to a wheel even if the other has lost traction. (Up to the equivalent of about 80% lock up). Changes in the situation are automatically adjusted for instantly by the inherent nature of the design. Everything operates in a precise balance.
There is no need to choose a trade off between maximum traction, and the ability to go around corners.
It's also important to note that while this design relies on the friction characteristics of the gear teeth to control its behavior, it *doesn't* use friction to transfer power (like a Clutch Plate LSD). This design doesn't have any more wear than a conventional differential.
The Torsen is probably one of the most elegant mechanical designs in automotive history."
http://www.318ti.org/notebook/diffs/index.html