Whats the difference between a lock up torque converter and a stock one?

A standard torque converter always transmits the power through the fluid - even at crusing speed. This results in slippage and reduced effeciency. With a lock up torque converter clutch, once you are near crusing speed the clutch locks up the torque converter so that it rotates as a solid unit. If you need extra power - climbing a steep hill, etc it will unlock. As a result you have improved fuel mileage and less heat generated in the transmission. If you have a tach you will see the RPM drop about 200 ( more or less) when the clutch locks.