What is a limited slip differential? Is it similar to a rear locking differential?

I believe this is correct (and I will address RWD cars here):

>> An open rear drives one half-shaft only.

>> A limited slip, or 'LSD' sends power to the wheel with better traction via clutches (or at least, it used to- not up on recent LSDs).

>>A 'posi' is locked; ie- both half shafts are directing power to both wheels all the time. Often makes for 'scrubbing' of the rear tires in tight turns (the inner has a much shorter arc to travel than the outer).

>>A locking diff is the link between the 2: normally open but able to lock up as a 'posi'.

You are more or less correct balth. With an LSD you're able to have one wheel spin at a different speed than the opposite wheel. If you had a posi-trac rear, you'd be wearing one tire out more around the turns. That's why most vehicles don't have a posi-trac rear anymore.

Right. LOCKED rear ends are not very street friendly.