LSD's in the case of OEM, and most of the aftermarket ones available for the EP3 are torque biasing diffrentials that bias/manage the torque through the front wheels to assist the cars handling/cornering.
The advantages are much improved handling through the corners. I am led to believe that Wavetrac is the LSD to have because it works both under load/and unloaded too. Unlike most other LSD's on the market; that only perform under load.
Other companies include Kaaz, Quaife, Mugen etc. etc.
OEM is said to be good, but cannot take as much power as an aftermarket diffrential. OEM would be good to run on a stock car I guess with a few small mods. But for seriously modded cars, seeking more power, aftermarket would be the way to go to.
It is advisable to have the clutch replaced (depending on how old it is) when opting for an LSD - Oh and yeah they're transmission/gearbox installed.