Ok so I bought my 88 p/u about a month ago... I was told the thing had never been in 4 wheel drive in it's life. Me being a dumba$$ I believed that. It is in really good shape, but on the way home last night, I decided to see if it works fine. I pulled up to a vertical dirt wall and locked it in 4 lo. Now after giving it some gas to see if any front wheel spin happened while trying to go up the wall, nothing happened. The back spun deep into the dirt, but neither side of the front spun up any dirt, just sat there. This is my first toyota 4 wheel drive, now I am worried I have to spend alot more money (being I just rebuilt my engine). I locked the hubs, drove it for a little ways to make sure everything locked, then when up to the dirt wall. My questions is, where do I start looking, what are some tips for seeing if this thing really works??

Make sure the hubs are locking. Jack up the front end, lock the hub and spin the tire. Does the axle shaft turn or not and are the axle shafts present with CV joints intact. Then see if the front driveshaft is turning (in 2H - and that there is a front driveshaft installed) when you spin a tire and then try turning the front shaft by hand and see if the front wheels turn. Then go into 4H and the front shaft should not be able to be turned. If it does move by hand, pull the t-case shifter and see if it is installed right. It is possible to stab the end of the shifter in wrong and not be able to access all the gears.

FYI if it honestly has NEVER been in 4wd in its life, that is a bad thing. Owners manual says to put it in 4wd once a month to keep things lubed up.

A little confusing. You didn't state you locked the hubs the first time and that the front didn't spin. Then you went for a ride locked the hubs and sounds like things worked. What exactly happened.