Think about ESP working in reverse!
Instead of braking individual wheels to correct yaw, torque-vectoring will use acceleration!!
Totally neutral handling or even oversteer situations could be induced!

This system promises to one-up Honda/Acura SH-AWD because that system has no center diff to shift power between axles.

This new version of Audi Quattro could make Audi cars handle like never before and finally put out to pasture these tired arguments of "rear drive is always better."

If you go back and look at that Nurburgring footage of the S5 test mule and see how neutral the handling is, you'll see what I mean:

http://www.youtube.com/watch?v=4XYZPpN0bWA

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Audi to Offer Torque Vectoring

By Bill Visnic
Ward's AutoWorld, Feb 1, 2007 12:00 PM

Aware that it needs to maintain the top-flight reputation of its quattro all-wheel-drive systems, one of Audi AG's chief vehicle engineers says it will introduce a highly advanced form of quattro later this year.
Michael Dick, Audi's head of Total Vehicle and Chassis Development, tells Ward's the auto maker will incorporate so-called torque-vectoring technology into the next-generation quattro system slated to launch later this year in Europe for the all-new A5 coupe, to be quickly followed by the eighth-generation A4 sedan, which comes to the U.S. in early 2008. Both vehicles are built on the same all-new architecture.
Torque vectoring takes all-wheel drive to another level by varying drive torque not just between front and rear axles but also between wheels on the same axle.
By adjusting torque side-to-side, a higher degree of handling performance is achieved by delivering more torque to the outside wheel in a corner, turning the vehicle more sharply and precisely.
Torque vectoring also is a way to enhance safety, in effect an "active" form of the brake system-based vehicle stability control systems now common.
Dick says the next-generation quattro with torque vectoring will retain Audi's longstanding Torsen (torque-sensing) center differential to apportion torque between the front and rear axles, but adds a differential on the rear axle, incorporating electronically controlled clutches, to selectively apportion torque between the rear wheels.
Dick says Audi began testing its torque-vectoring quattro system early last year, and engineers will be ready to launch the system with the new A5 and then in performance-oriented S and RS variants of the all-new A4 sport sedan.
Dick says the torque-vectoring quattro system will deliver "driving dynamics as no Audi (has) before."<ul><li><a href="http://wardsautoworld.com/ar/auto_audi_offer_torque/">Audi to Offer Torque Vectoring article</a></li></ul>

Some folks like the Tail-out shenanigans. Not good for lap times or ultimate speed, but it sure is fun.

Hence why a lot of cars today are setup to understeer vs oversteer. Much easier situation to get out of.

But yeah, getting the backend out around a corner in a controlled manner is pretty fun in a RWD :)

It took me about 3 years of practice before I started to feel comfortable doing it.

<ul><li><a href="http://www.autozine.org/technical_school/traction/tech_traction_4wd_21.htm#SH-4WD">SH-AWD</a></li></ul>

Not that the current system is bad but it's good to hear that Audi has been developing a new Quattro system that we will see by the end of the year...