I have a question about front diff operation does the axle turn while going down the road when in 2 wheel drive... Meaning i want to know does the front axle just disengauge and the axle free wheel in the diff or is there a lock or something on the hub

 

There is an actuator in the hub that engages/disengages the 4x4. When you are in two wheel drive the front half shafts do not turn.

 

Correct, unlike the 97-03 which engaged/disengaged at the diff, the 04 ups engage/disengage at the IWE's (hubs). So the front axles do not turn while in 2wd and engine running. With engine off, the front IWE's are engaged (the default position).This beside the transfer case engaging the front driveshaft.