This is a widely debated topic, but I'll post my results. I am currently driving my second 1st gen rig. Both had/have transmission temp sensors. The first was in-line with the output line, same attachment point as the factory trans temp sensor, the second/current rig is in the pan. First rig ran almost like clockwork with the trans temp about 10* cooler than the engine, or right around 160-170*. The new rig runs at nearly the same temps, maybe 10* cooler. It appears the MHT pan does a good job of cooling fluid. I also removed the heat exchanger on the new rig, and as such the transmission definitely warms up slower, but does not run any hotter either.
- M2