As others have stated, obviously 4X4 is going to be better in snow/mud/etc., but whether it's 'needed' for Toronto winters depends, I think, on your expectations. I drove my 2WD in the couple of late-winter snowstorms we had this year, without any weight in the back and with the stock tires, and I thought it was fine. Not as good as a FWD car, but doable.
I would deliberately pull off to the side of the road (where the snow's the deepest) at corners and at the bottom of small hills, and never had problems getting going, or making it up the grade. The traction control helped a lot, and I think it, or a LSD is a must.
Which leads to a question... Is there any point in getting a LSD if you have TC - don't they both have exactly the same effect?
I did recently put winter-rated Dunlop RVXTs on the truck as an extra precaution for next winter, though. And I'll pack some of those traction mats.... just in case.
