http://www.howstuffworks.com/differential.htm

Diff Oil works as a fine tuning tool.

The heavier your diff oil, the harder the gears have to work to provide power to the wheels.

Depending on your truck, you'll either have a setup with 3 diffs (front, center, rear) or 2 diffs (F & R) and a transmission.

Trucks with a center diff allow you the option to fine tune how easily the truck sends power to the front and rear.

Lighter diff oils will transfer power easier. The result will be the front end will get a lot of power under acceleration. One side effect of this may be excessive ballooning, depending on your application. (bashing, racing, etc).

Heavier oils will have the opposite effect. One side effect can be easier to wheelie, etc.

The choice of oil weight is dependent on your application. Racing, you'll probably want to go with lighter oils. Bashing/Monster trucks, probably heavier oils.