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Neat, but what truck uses the 1356?

Full size Broncos and F150's, mostly.

Excuse my ignorance, but what is this? And what does it do?

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This is a doubler, which means that it is an adapter to 'double-up' transfer cases, i.e. run two instead of one. Where one transfer case allows you to shift into low range, typically anywhere from a 1.96 ratio to my 4.3 ratio; a doubler allows you to compound that ratio even further. Wherefore, instead of paying, say $3000 for an aftermarket transfer case, such as an Atlas III with a 4.3 ratio, you could instead run two Borg warner 1356 transfer cases, which each have a 2.72 low range individually (7.398 when doubled). These cases can be found for $75-$150 or less. The main disadvantage to this setup vs. a single transfer case, is the amount of space it takes up under your vehicle, which also shortens the rear driveshaft.

Correct. Transfers more power to the ground at low RPM's with less risk of wheel spin.

I'm hoping the Trac does a little better now and doesn't put so much stress with the 5.0 on the motor.

The 4.88's will definitely help.

That will be sweet, not that she didn't do well on her own before hand. I've always been pretty impressed by what John put the Trac through and her being pretty much stock. She did extremely well, so now we'll get to see what she can really do.