The NP231 transfer case has 1) 2WD, 2) "Part-time 4WD" where both output yokes are locked together, and 3) fully locked 2Low.
The NP242 has exactly the same thing (the three positions of "2WD," "Part-time 4WD," and "2Low") but it adds a fourth "Full-time 4WD" position where both output yokes are connected by an open differential. The open differential connection is the same as any basic "All-Wheel Drive" system.
In fact, it is pretty accurate to describe the AMC Eagle NP119 as just an open differential Full-time 4WD because it is designed to never use the limited slip function in normal conditions. Its not really a limited slip differential at all because it never fully engages anything, unlike a true limited slip differential. The viscous coupling doesn't engage quickly, it hesitates until enough slipping has occured to generate enough heat inside the viscous coupling to lock up. It doesn't actually lock up either, since it really just increases resistance to an output which changes the ratio of resistance first and then causes a change in the ratio of torque split second. If that statement doesn't make sense to you, read my FYI at the bottom of this reply.
A true limited slip differential that reacts immediately to slip conditions is only found in the NP247. That transfer case has a clutch system that made the viscous coupling systems instantly obsolete. It reacts in much less time than the NP119, NP219, or NP249. It generates much more holding force. Realistically the difference between a NP219 and a NP242 in "Full-time 4WD" is negligible.
Since the NP242 has all the modes the NP231 has plus an extra, it wouldn't make sense to ever buy a NP231. The reason people like the 231 so much is that it has a reputation of being stronger. That's a myth that started because the NP231 has a wider chain then the NP242. Bigger is better right? The NP242 has a chain only about two thirds as wide as the NP231 chain because of the internal space needed for the extra functions added. Despite the smaller chain, New Process designated the NP242 with a "4" in the second digit. A "4" means it is stronger than a "3". If it has a smaller chain and weaker reputation, why would the factory label it as stronger?
The reason the NP242 is considered stronger than the NP231 by the factory is because it incorporates a torque bias. In other words when you are locked in "Part-time 4WD" 60% of the applied engine torque goes to the rear axle and only 40% of the applied engine torque goes to the front axle. Most Jeep guys think that the NP231 will hold up better than the NP242 with huge tires because they see the wider chain and they think it will perform better offroad because it doesn't have a torque bias. In reality the front axle of most vehicles, especially AMC Eagles, have a front axle that is much less as strong as the rear axle because of the added complexity of steering. A torque bias then is the only way to get the most strength out of your car as a whole.
Thus why the military Humvees use the NP242 and not the NP231. It's stronger and more capable despite the reputation.
FYI An open differential splits torque by a ratio exactly opposite the ratio of wheel resistance. Lock up all four brakes and all four wheels will have the same rolling resistance, so all four wheels get the same engine torque applied. Remove the brake shoes from one wheel and leave the rest locked up, and suddenly one wheel will have no rolling resistance while the other three still have a high resistance. Since it has 0% of the rolling resistance the other wheels have, it will get 100% of the engine torque. If one wheel had 10% of the rolling resistance of the others, than it will receive 90% of the applied engine torque, and so forth. In a turn this is a good thing because the wheel that needs to go faster will be pulled by the wheel that needs to go slower, so it will have less resistance and thus get more engine torque than the other. An open differential will let the outside wheel go faster than the inside wheel naturally and smoothly during a turn.
During a slippery condition where one wheel has considerably less traction and thus less rolling resistance than the other, it will unfortunately recieve a larger amount of engine torque than the other until eventually it is the only wheel spinning. A limited slip differential engages once the difference in wheel rotation speed gets too big. When it engages it locks the two together either fully or in a given ratio. This prevents the car from getting stuck.
A viscous coupler is not the same thing as a limited slip differential. Instead of locking together mechanically, it simply increases resistance to one wheel spinning faster or slower than the other as it heats up. The increased viscosity of the oil as it heats puts resistance on the faster wheel until the ratio of rolling resistance increases. In consequence of the rolling resistance increasing the ratio of applied engine torque likewise decreases, which gives a similar end result as a true limited slip differential would behave.
In summary the viscous coupler behaves just like a limited slip differential when subtle improvements in traction are needed, but in severe conditions the viscous coupler doesn't do diddly-squat. It isn't much better than any other open differential. With a NP242 you have the option of just clicking it into "Part-time 4WD" for reliable operation in severe conditions.
Notice too that the NP119 can not run in 4WD without a front driveshaft. That is because it reduces the rolling resistance in the front yoke to nearly zero while the rear yoke has 100%. The open differential design wants to then give the front yoke 100% of the engine torque and the rear yoke 0%. The viscous coupler will be able to keep the car moving for a short distance before it gives up and dies. With an NP242 the open differential in "Full-time 4WD" will not be able to push the car without a front driveshaft, but you still have the option of shifting into "Part-time 4WD." Once you do that you can drive the car just fine with immediate traction.
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