A differential is inside the final drive (ring & pinion) gears and allows the left and right wheels to turn at different speeds. This is important of course for going around corners. The downside is that if one wheel is on slippery ground (ice, gravel, mud, etc) the car doesn't go at all, as one wheel is turning but slipping and the other not turning at all. Hence the usefulness of LSD or locking diffentials, which are typically used on high-performance cars. Locking is typically used on off-road vehicles, LSD for road vehicles, including racecars. Most productions cars did not and still do not come equipped with LSD. Less expensive cars (like the 1200) did not even have it as an option, however Datsun Competition sold an LSD that fit Datsun 1200.
Limited Slip Differentials come in many different types, but the main thing is they limit wheelspin. This is useful in racing and in low-traction surfaces (rain, snow, etc). Nissan Performance racing parts used to sell a clutch-pack type LSD for the H145. This part is NLA, however it may be found occasionally in specialty shops or on eBay.
For more information on other types, see: Rear Axle Swaps - LSD
Parts
From the 1984 Nissan Competition Catalog:
H145A LIMITED-SLIP ASSY (TO 8/74)
- 38420-H1020 L/S ASSY
- 38423-H0120 SIDE GEAR (2)
- 38424-H0120 THRUST WASHER (1.0MM) (2)
- 38424-H0120 THRUST WASHER (1.25MM) (2)
- 38425-H0120 PINION (4)
- 38427-H0120 PINION MATE SHAFT
- 38429-H0120 PINION SHAFT
- 38430-H0120 DISTANCE PIECE
- 38431-H0120 PRESSURE RING (2)
- 38437-H0120 CENTER RING
- 38432-H0120 FRICTION PLATE (1.5MM) (2)
- 38432-H0121 FRICTION PLATE (1.45MM) (2)
- 38432-H0121 FRICTION PLATE (1.55MM) (2)
- 38433-H0120 FRICTION DISC (1.5MM) (2)
- 38434-H0120 SPRING DISC (1.5MM) (2)
- 38435-H0120 SPRING PLATE (1.5MM) (2)
- 08320-61000 SCREW (4)