Originally Posted by esfourteen

The car wont make any more power on a dyno, changing the final drive changes how the car accelerates. A 3.69 (stock final drive ratio) the transmission output turns 3.69 times to turn the wheels 1 full revolution. By using a shorter gear in the final drive, like the 4.08, the transmission must now turn 4.08 times to turn the wheel one full revolution. Basically this allows the engine to accelerate quicker because it requires less effort to turn the wheels, but you won't be going as fast.

For example, if your stock gearing is at 40mph at the top of 1st gear, using a shorter gear would be at say 30mph, but it would get to 30 faster than the taller gear will hit 30mph. I just made those numbers up for the example, but I hope that makes sense.

The net result is quicker acceleration at the cost of some top speed and fuel economy. I believe someone with the 4.08 gears (jnaut maybe) said he was still able to hit 160mph, so the loss in top speed isn't noticeable without forced induction and a death wish.