This is one of the biggest misconceptions in the automotive world, that I am aware of. Your description of limited slip is excellent. it also happens to be the description for posi. The name posi comes from Posi-Traction, which is the trademarked name GM gave to their revolutinary new limited slip rear end in the late 50's/early 60's. Now, since any car that would even consider racing had enough power to break loose the driven wheel, theat meant the other would start spinning, too. Suddenly, the GM guys with their new "Posi" rear ends had both wheels spinning! Thus the name posi, and the concept that it made both wheels always spin, was born.
Don't forget to leave an apple on my desk.
Take care,
~Chris