Some have done it, but it's not such a good idea. If you install it there, you'll need to use a T fitting because the factory sensor still needs to get a temp signal. Problem is that it's not in direct contact with the moving fluid stream so the temp reading is not accurate. This sensor tells the computer when to shift OD in/out. Too cold and it won't shift into OD. Too hot, above 270F comes to mind, and it will force the trans back to 3rd gear. If you disconnect the sensor you will not have OD. An alternative is to install a resistor in place of the sensor to fool it into thinking the trans is at normal operating temp. Then you can use the port in the line to install the sender for the temp gauge. The downside to this is that if the trans gets too hot there won't be any safety backup to force it into 3rd gear and reduce temps. It's relying on you to keep an eye on the gauge at all times. End result is that the sender for the temp gauge should really be installed in the hot line in a seperate location from the factory sender. This does require removal and cutting of the line to install the T fitting. It's easiest to locate the T where the line crosses in front of the trans or on the leg where it goes up to the heat exchanger. I installed mine in the latter location using a brass T and compression fittings. So far so good. It's been on there for about 6 months and 12k mi.
Sean