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I was wondering about this. Watched some youtube videos on it and read some stuff on here. One thing I'm a little confused about is when using the manual diff, obviously when it is set to "lock" that means there is very little slip going on and all the wheels are getting max power, but when it is set with say only one bar does that mean the majority of the power is going to the rear?
Yes, one bar is 35f/65r

For example if there is lots of snow on the ground and I just want to play around I've been setting the diff to lock turning the vdc completely off (orange) and the si to sport or #. Is that the best setting for snow and dirt or wet pavement to have the car to cut lose?
You shouldn't be using lock unless you're in a hairy gravel situation or in a heavy snow situation in the same concept where you would grant the need for a 4x4 truck. You don't want to use a fully locked 4x4 truck on dry pave unless you want to break something or hear your tires squeal at every turn. Same concept applies to a true AWD system fully locked.

If I wanted to just be carving corners quickly with maximum traction I have been setting the VDC to the green setting, diff to auto - and the si to sport #, is that correct?
Yes, you may also want to use manual fully open, one bar, to get better results without any input from the DCCD Auto.

Normal commuting in the snow or ice I have been setting the vdc to orange, the diff to auto + and the si to sport.
This is completely up to you and how you feel to drive. In the winter, I drive with VDC on green. Other than that, I only use the DCCD depending on the situation I'm going into. Auto is more than sufficient for winter daily driving. VDC on green allows you some freedom to move the car as you wish but it's there to step in if you go too far without cutting your control of the car's power.

Lastly if I wanted to try and smoke the tires a little or "drift" a little on dry pavement would I set the VDC off, the diff to manual with just 1 bar (furthest from lock) and the si to #......initiate with a flick or a hand brake or combo? Am I on track with those or can someone correct me.
Yes, full open and flick, but you want to try to avoid this one as tempting as it is. Leave the playing to an empty parking lot full of snow. This way you don't damage anything.

On a final note, SI drive controls throttle response only. Choose whichever pedal feel you prefer in whichever situation you're into. The only difference is that you will have to push the pedal further in I (full power 100% on pedal) to get the same effect in S#(full power 54% on pedal).
 
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