Ok the hubs are auto/manual. This is how it was explained to me by a tech. For normal driving when 4wheeldrive is needed you can shift on the fly. For severe heavy duty work and needing 4wheeldrive manually lock the hubs in.
I think ford knew how crappy there hubs and auto-locking system is and knew it would fail. There for they gave you the option to manually lock them. I now have to manually lock them because my vaccuum system has a leak and they do not automatically lock out any more.