The diff lock locks the 2 front tires together so you have true 4x4. If you don't have it locked, the front differential will allow the power to go to the wheel with the less traction (just like a vehicle without limited slip). So it's really only 3 wheel drive. Once that front tire starts to slip, then it just spins, and you loose any assistance from the front wheels.

 

So mine is a 3 wheel drive?
Is there a kit to make it 4wd?

 

Look around. I think there might be.

Full 4wd is only really needed if you do a bunch of deep snow or mud. In most cases the 3wd works fine. I found that by switching tires from the stock ones to my Dirt Devils, that I can go in places in 2wd that it would have struggled in 3wd (and sometimes I'd have to lock it into 4wd).