This is the best explanation for the Hillard clutch that I've came across:
The Hilliard clutch is an over running clutch. It differs from a normal over running clutch in that it can engage in either direction. This allows the Polaris to have 4 wheel drive in both forward and reverse.
Like any over running clutch, it will only engage when the input speed attempts to exceed the output speed. The way we use this feature is we connect the input of the over running clutch to the front wheel half shafts and connect the output of the over running clutch to the wheel. Then we can cause the over running clutch to engage by causing the front half shaft speed to attempt to run faster than the front wheels. This is exacly what happens when the rear wheels start slipping. So the over running clutch engages when the rear wheels start slipping.
In reality the rear wheels are always slightly slipping. However, we do not want the Hilliards to be always engaged. So the way we solve this problem is by running the front differential at a slightly lower gear ratio than the rear diff. This causes the inputs of the over running clutch to run slightly slower than the front tires. The ratio difference is about 20%. Now when the rear wheels slip at 20%, the Hilliards engage and power is transfered to the front tires.
Now a normal over running clutch only engages in one direction. However, we need a bi-directional over running clutch for our Polaris. The way we make this happen is to allow the over running rollers to be held in a "cage" and we apply drag to this cage. When we apply drag to this cage AND the input speed attempts to exceed the output speed, the rollers will jam themselves between the ramps in the over running clutch and the smooth surface of the inside of the wheel hubs. Understanding this drag is key to understanding how the Polaris system works.
The way we create this drag is to send current through an electro-magnet. This magnet attracts a plate that connects to the "cage". It is this electromagnetic attraction that causes the drag.