Poor mans LSD; at speeds under 25mph, the ECU will brake a drive wheel that is breaking loose, basically trying to equalize wheel speeds. Helpful in poor weather mostly, and helps control the power that VR6's and 1.8T's can lay down to improve drivability for the "average" driver.
EDL is an abbreviation for Electronic Differential Lock. Its not a LSD (Limited Slip Differential), and it only kicks in at speeds under 25mph. It works with the ASR (Anti Slip Regulation) traction control system to help the front wheels get traction. But those cut engine power, while a LSD does not.
LSD is still a worthwhile mod...does a lot better job adding traction.