The correct answer is D) With an azimuthing thruster the prime mover is located inside the hull, and with a podded propulsor the prime mover is located outside the hull. This is the correct answer because the fundamental difference between an azimuthing thruster and a podded propulsor is the location of the prime mover (the engine or motor that provides the propulsive power). In an azimuthing thruster, the prime mover is located inside the hull, while in a podded propulsor, the prime mover is located outside the hull, within the pod. The other answer choices are incorrect because they do not accurately represent the key distinguishing feature between these two propulsion systems. Choices A and B are incorrect because the steerable nature of the thruster/propulsor is not the fundamental difference. Choice C is incorrect because it reverses the location of the prime mover for the two systems.