Stan - You can and I have a 2nd one way diff made up with a xx4 pulley on. Ran it indoors but needs to be tried outdoors to really know what's going on.
Scotty - Yes, you can only use the inner hole. Just make sure the extra material on the outside doesn't catch your wheels. It catches one type but can't remember which, most just cut the outer hole off.
See this thread for extensive discussion on the rear end options and some nice pics from me
