I believe it to be a combination of both...............you should have a littel button inside the car that says "Lock" or something like that with a picture of your tranny.
Anyways when the tranny is in the "lock" position your in four wheel drive...meaning all the wheels are driving......but when its in normal drive its in all-wheel drive...and depending how the tranny is set up..will either send power left and right--to the gripping wheel( or how I was told, one wheel in the front is driving and one wheel in the rear is driving)...or posibly work like a subaru...left/right-back/front.
This is based opon my experince with my 89 corolla 4wd wagon(and the sales guy at the local dealership).....cool car. (not a chick magnet though)
The only time I could do donuts in the thing is when it was in 4wd drive. cause it wasnt busy trying make the tires grip.
does this make any sence at all?