I keep on hearing about locking the rear diff, but I don't know what that means. I know what a differential is, but this "locking" concept is new to me. Can someone explain that to a noob like me? The way my TT-01 is set up now (stock), when you manually rotate one wheel, the other rotates the opposite direction. How would a locked diff work and why is that important for drifting? Also, how can I lock the diff? Is it really necessary to drift?

it is not required but they say you get a better drift out of it by locking them, .. it means just what its called... you lock it up,

But what does that mean? Does it mean that when you rotate one wheel manually, the other doesn't move at all? Maybe it goes in the same direction?

with a locked diff both wheels turn the same direction at the same speed. This helps you break traction easier. To lock your diff on your tt-01 you need to pull the diff out and unscrew the diff cap. After that remove the three planetary gears. put silly puddy under there on top of the outdrive gear. Replace the three planetary gears and cram silly puddy in there and close the diff back up. you will notice that there is very little play in the wheels and they will travel at close to the same speed almost all the time. There are other ways to go about doing this such as using nitro tubing or removiing one of the three gears and jaming it between the other two. Look on youtube there are tutorials.