To add on to what Justice said, the selectable locker is most desirable for the street/off street combination (in my opinion) because you can run fully locked or open whenever you feel the need.

That said, the reason the "lockrite" would be better than a welded diff is that it allows the diff to "ratchet" as the inner and outer wheels turn at different rates through tight turns on a "grippy" surface. There is some benefit in terms of tire wear when the rig is driven on the road a lot. There are also manufacturer recommendations regarding how much power you put to them and their reliability, but with the factory Montero/Raider 2.6, I don't consider that to be much of a concern. So, while this is not a selectable solution, it is a compromise for both uses.

I don't know enough about LSDs to give any type of knowledgable comparison, so I'll leave that to someone else.