What are differentials? I think they are what creates gear ratios in the cars, but I'm not sure. and what the difference between center differentials and front/rear ones, besides where they are located?

In a nitro powered RC car, they basically function the same as the one in your 1:1 car....they allow one tire to turn faster or slower than the opposite tire.....Smae with the center diff....They can be tuned for varying track conditions with different weights of diff lube, allowing the car to be tuned to the surface it runs on....

As airbus said + the reason for them is that when a car turns, the wheels travel a different distance (inside and outside line) and hence they need to be able to rotate at different speeds.

As for the gear ratio like you mentioned, it's not really a gear ratio, but called the final drive ratio. You change gear ratios with the use of pinion/spur gears but of course the differential final drive has an impact on that

thank you both for the information. That made alot of sense.

Just check out this link. It explains about various types of differentials.

http://www.howstuffworks.com/search....=differentials

From Dictionary.com:

Also called differential gear. Machinery. an epicyclic train of gears designed to permit two or more shafts to rotate at different speeds, as a set of gears in an automobile permitting the rear wheels to be driven at different speeds when the car is turning.