I'm confused by the term "Hypoid". Can someone offer an easy to understand explanation and whether or not the differentials in our cars are hypoid please?
A hypoid crown wheel and pinion is set up - as pointed out by Ron Grant - with the pinion centre line set below that of the crown wheel. This increases the tooth contact and improves the operation of the crown wheel and pinion by preventing (but not curing) the tendency for the pinion to climb up the crown wheel while it is driving.
The established way of increasing transmission strength was to increase the size of the transmission gears - this was not only heavier but also gave problems with ratio selection. The lower the final drive ration the smaller the pinion gear hence on the ultra low axle ratios the risk of smashing the transmission. Hypoid transmissions can therefore use smaller ring gears and pinion diameters to drive more power. Using a smaller gear train allows for a smaller and lighter casing too! The push to improve interior space for passengers and load space in cars led to all sorts of improvements in transmission design (eventually moving the whole lot under the bonnet).
The hypoid transmission is a compromise (a very succesfull one too) between weight, strength and packaging - getting the most out of the smallest available unit. The problem comes with ratio changes - the steps between available ratios are larger than with a conventional ring and pinion because of the lower centre line for the pinion there is less space to fit a larger pinion gear.
The other problem is heat build up and lubrication - the pressures inside the casing are greater and therefore you need a more dynamic lubricant. On MMM cars we use a thicker oil to cope with the heat build up - on a hypoid it is important the lubricant flows freely so a thicker lubricant is not suitable. Most hypoids use a lubricant with a lot of additives to cope with the increased pressures and heat without losing the oil film.