I agree with Jimbo, up to a 10.5/19t, the rear diff is fine, if built correctly (my three kids abuse there's enough, and they are still fine after 18 months), if you intend to race or put some more power through, for reliability, use the 501X one peice outdrives.
The reason why the diff melts, is the diff ring slipping on the plastic holder. This overheats the diff, which then melts the pulley. The 501X diff halves hold the plates in place, with no glue, they don't get warm, so don't melt the pulley (as long as they are set correctly).
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