There are two options when choosing a differential for your SC10...
1. You can keep the Associated SC10 Gear Differential that comes with your SC10 kit or RTR.
2. OR, buy the Associated SC10 Ball Differential.
Gear Differential
We think the first option (gear diff) is best for most SC10 owners. The gear diff comes with your kit or RTR and it has proven to be an adequate differential mechanism for any level of racing. Another benefit of the gear diff is that it is very low maintenance.
If you decide to keep the gear diff, you need to properly fill it with grease. The SC10 manual suggests that you only need a drop or two on each gear, but don't make that mistake. Your gear diff will run well for a few sessions, but then it will dry up. You need to fill your entire differential with the black grease provided in your kit. If you have an RTR, it would be wise to check your differential at some point and add grease if necessary.
You can also fill your gear differential with differential fluid (oil). Some people think the grease is better and others say that the fluid gives the differential a smoother feel coming out of the corners. Stick with the grease if you are still a beginner, but if you are ready to try something new, give the diff fluid a shot. We suggest starting with fluid in the range of 5000wt - 7000wt, depending on your track conditions. The beauty of using diff fluid is that you can adjust the weight to your driving style or track surface.
Ball Differential
Your other option is the Associated SC10 Ball Differential. The main advantage of the ball diff is how easy it is to tune. You don't need to open up your transmission or even take your wheels off.
There is a big disadvantage to the ball diff. You will need to rebuild it every so often to keep it functioning properly. The rebuild kit costs about $15-$20 and you will have to rebuild this differential after every couple months to keep it in decent condition.
Here is a quick summary of the ball diff vs gear diff question written by Ray lan on the RCTech.net Forums:
"You should first try to understand why a car requires a differential in the first place. If you really understand, the rest of this post will be nothing more than a confirmation shot.
A gear diff is more durable and is maintenance free until the gears wear out, by then the car itself should have worn out. You can run them dry(no grease) or with grease of different viscosity. Tamiya Anti Wear is a very thick type of grease as compared to Tamiya Ceramic grease. The type of grease used affects the amount of tightness. Thicker oil/grease = Tighter diff action.
Gear diff have less consistant performance due to grease heating up during long runs causing the grease to loose viscosity, or by grease leaking out of the diff housing after prolonged use. Greased diffs require top up to maintain performance.
A ball diff requires more maintenance, replacement of diff balls and diff rings. The main advantage of a ball diff is ease of adjustability of tightness. A car's differentials affect its driving characteristics a great deal. A driver who is able to setup his differential well will have the advantage of a better handling car. Some say ball diffs may be allowed to slip by not tightening the assembly too much, allowing the slippage to control torque going to the rear wheels. Contrary to popular belief a slipping diff will quickly overheat and damage the diff. If your car can't handle without allowing the rear diff to slip, you need to look elsewhere, diffs must not slip."
- Ray Lan from RCTech.net