There are two sensors if I recall correctly. The RWAL which reports the speed of the vehicle and then a sensor that reports driveshaft speed.

2WD has the trans sensor in the OD unit and the 4WD has it in the t/fer case.
Lose the trans sensor and the trans is in limpin/default. Loose the RWAL sensor and you lose the speedo.

If I recall correctly when changing the axle ratio you have to compensate by telling the PCM what the ratios is. I think that is what Ron was thinking - regarding the "pinion factor" which is normally the term we use on the FWD -

The algorithm in the PCM uses shaft speed to control shift schedule. You may not see a big difference by leaving it where it's at - but if you do you can change the factor to dial it in.