How does the OD work on 4th gen automatic's.
I feel it shift into OD and watch the rpm's drop and then a second or two later the rpms drop a little more. What's that all about? Is there two ratio's in OD?

Futhermore, how much difference in mpg would it make if I drove with OD off around town, for exp. speeds 45mph and under. I like to be able to accelerate moderately w/o having the tranny kick down. At my last fill up I only got 18mpg and I would consider my driving to be somewhere between city stop and go and highway. I read some of you are getting 28mpg. Is that all highway miles? or is there something wrong with my car.

Possibly a lock-up torque converter would account for the 2nd change in rpms. Gas milage? Don't know, but let me know, mine hunts on the highway from 3rd to 4th constantly.

Ok, leave the OD on... don't mess with it. It's your 4th gear. There is no reason to drive around town ni third gear. The term over drive just means gear ratio less than 1:1. On manuals for example you could have 2 over drive gears.

As for what appears to be a 5th shift, it's not. The torque conver is locking up for better efficency.

Gas miles will probably suffer greatly if you decide to tool around town in 3rd gear.

-Shing

Exactly right.

Does leaving the transmission in 3rd gear (OD Off) damage the transmission at all?

No.

It,s there if you happen to tow something that could cause damage to the tranny. OD is a weaker gear compared to 3rd.