Yep, its easy to see how castor angle is reduced when front end is lifted. The length of the shock and spring height is increased. The axle is then pushed down and due to it being mounted to the chassis at the radius arms, it pivot about this point therefore rotating the axle itself the more it's dropped away from the body.
Not much but a couple of degrees in castor change can make very noticable differences in road manners, especially in turn in, stability under braking and self-centering. On BMW E30s and E36s for example the rear wishbone bush can be changed from a concentric bush to an eccentric bush. This shifts the rear of the wishbone outwards and therefore the front arm from the subframe to the hub is pushed forwards. Only is moved forward maybe an inch or so but the difference is instantly noticeable when driving it.
The castor correction arms as well as the adjustable pan-hard made a big difference to the handling of my 110. It was a little twitchy before and wandered abit under braking.
GINGE is right about castor correction arms only fixing your steering castor issues when lifted. They pull the pinion output flange back down again. This will make your prop bind quicker with the extra travel and whatever lift you have to start with when off-roading.
On the road, it has it's pros and cons.
By tilting the prop back level (or in the case of the 110s or Discoverys etc, to the angle it sits originally), it'll be back in it's correct phasing. This will reduce vibration etc.
But on the other hand, with the lift.. the prop will be rotating at a more acute angle so will be constantly putting more pressure on the UJs.
By having the lift without the correction arms, the prop will run at less of an angle so possibly less stress on UJs in that aspect but it's phasing will be out so it's possibly it'll vibrate unless it's removed and front and rear halfs put together in a different spline to be phased right for the new pinion angle.
Sorry if that's all abit confusing... it sounds right in my head but hard to describe it without a model or diagrams
