I sent this to the list a long time ago, and decided it could live here. At the time, there was a discussion going on about why cars / drivers got sideways, and this was my response:
In developing your theories, please keep the following in mind:
1: The amount of friction, compared to tarmac, is incredibly low.
Also, the horsepower vs grip scenario is totally upside down.
2: The amount of grip available on the top of the road (where you
would walk) is different than the amount of grip 1/2 inch
underneath the surface, where you'll be if your spinning tires.
3: The amount of grip on line (and I'm talking about the individual
two tracks of the tires, not the width of the car) is different
than off line (car placed 8 inches to one side or the other).
4: The width of the on line tracks varies depending on how sideways
the people in front of you drove it, in turn dependant on the
severity of the corner.
5: The amount of "sink" you get into the road at a corner depends
on the local geography, some dirt roads are essentially "bumpy
dirt concrete with sprinkles", some are just progressively larger
pebbles, starting at pea, ending at watermellon.
6: On dirt, locking up your brakes is far more effective than not.
Even more effective than that: locking up your brakes while
your car is pointed 30 plus degrees from where you're travelling.
This way each tire can dig it's own trough. Caveat: often you
are using your brakes not for stopping or slowing, but to change
the weight transfer, and this is not done with locking...
7: Weight transfer takes more time to initiate with less grip. Unless
you're already out of control, i.e., look at spins on tarmac
that people try to correct: the same size inputs given to
"correct" the initial slide lead to larger and larger spins.
So if you want to be able to change the direction of your car
quickly (as you might if you're coming into a corner where you
aren't sure where it goes) go into the corner sliding. Note
that this means you start the slide before the corner, once
you are there you are too late.
8: The "blind" rallies we do in America (no walking the course) is
not relevant to the discussion of WRC drivers. They've been driving
the course all week, and with pace notes, you can conclude (for
theoretical discussions of why they drive like they do) that
the roads are essentially memorized. Some of the discussion
herein applies only really to US rallies, where there are more
suprises in road conditions / curves.
9: AWD and their differentials... well, yes, they do affect everything.
But you find AWD, FWD, and RWD all come through medium corners
somewhat sideways, so the differentials aren't at the core of
why you drive dirt sideways.
10:"Counter steering like dirt-trackers" only if they've overcooked
it. A proper slide on medium corners will put you into a
proper 4 wheel drift with all your tires pointing in the same
direction (excluding those occasional rear wheels with broken
suspension, etc.

This is one of the big differences you'll
see between the fast guys we have here in America, and the
the faster guys from Europe who come over and beat them. *grin*
It looks like they never turn their wheels more than 15 degrees!
11:There often isn't room for a "classic" cornering technique
on a hairpin. Handbrake turns also keep you doing all than
turning in the center of the road. The "classic" technique
would have you exiting at the extreme outside of the turn...
right next to those trees/rocks/cliff/fence/bridge railing/
lake/drop off/car/spectator/marshall/banner tape/more rocks.
Now, the astute among you will notice that I still haven't told
you why they do it... I think it's just because it's faster.
Anders