Tractor

OK, keep hearing this reference over and over again, and I understand the theory behind it. What I want to know is, does it really have that much of an effect? Will my 300+ bhp Type R be comparably quick to a less powerful car of same weight, but less transmission loss (ignoring traction issues)? Or is it a load of bollock$?

Finally, my car feels quickest with the central diff completely open, and slower with one notch forward. Does keeping the diff open reduce transmission loss?

Answers eagerly awaited from people who know what they're talking about....

Cheers