It is important to get the definitions down first, since for any four wheeled vehicle, all wheel drive and four wheel drive literally mean the same thing. Generally speaking "all wheel drive" implies permanently engaged or automatically
engaging four wheel drive and "four wheel drive" implies manually engaging, part time four wheel drive. The auto industry usually abide by these definitions but not in all cases. The now departed "all wheel drive" Ford Tempo and
Subaru Justy were really part time manually engaging systems, like the older Subaru GLs. The term on demand four
wheel drive is quite ambiguous. It can either mean that it is a part time manually engaging system or a part time
automatically engaging system!
    A permanently engaged four wheel drive system needs to have three differentials to enable it to apply power to four
wheels and be able to turn without resistance: The front, rear and center diffs. (diff = short for differential) This is
because the distance traveled by the turning front wheels is not the same as the distance traveled by the non articulating
rear wheels.
    Okay, and on to the advantages and disadvantages. The advantage of an all wheel drive vehicle is that you will have unparalleled traction and control on paved roads, heavy rain, and light snow. The disadvantage is that this system is not that good for hardcore off-roading (for example: no rock crawling, traveling through sand, etc.). The advantages of a four wheel drive system is an on/off feature and great off-roading abilities. The disadvantage is that it has verrrrrrrry poor handling on paved roads (but then, you could turn the 4WD feature off).