As far as using your cruise control in "hilly areas", you aren't even really supposed to do that. It causes the transmission to cycle in and out of gears, although it sounds like your transmission is screwed up enough already so maybe it doesn't even matter. Cruise control is meant for flat, freeway cruising at highway speed. Good luck with your transmission though!
An update on my original comments.
Firstly, the hilly terrain with the cruise control is on the Bruce Highway on the Nambour bypass - it is main highway at 110km, but rolls up and down some rather steep grades.
Secondly, I have figured out how to drive with the electronic throttle which solved the "lag" on changedown on the highway. I came across an article on fly-by-wires in a boating magazine. Pressing down the throttle slowly as per the old cable accelerators tell the computer that you want to go fast, but not urgently. You have to be brutal with it and slam it to the floor - then it calculates that you want to go fast very quickly and responds accordingly. Obviously you have to ease up before it gets too carried away. The engine management will only feed as much fuel as it can optimally use - so there is no fuel wastage.
Finally, I have just had the 50,000 service (2.5 years). They rang to say it needed a fuel system clean - I only ever use premium unleaded. I was a bit surprised at this, but it always idled a bit roughly when it was cold. I said OK - do it. SO I pick up the car at 5pm - and a bill for $900. Hell! $314 for the fuel system clean. And complete drain and new lubricants for the gearbox and diffs.
But what a difference to the car. All of the problems I complained about since it was new have disappeared. It is a completely different car. Very smooth to drive - no roughness at cold idle. Gear changes are very smooth up and down and 2-3 and 3-4 now happen at 2500-3000. That's 1000rpm less than before. And they tell me that they did not do any adjustments. I don't believe them!!! Either the car comes bad from Subaru or I got a bad one.
I complained to the dealer and they've come back with a mediocre offer which I'll probably have to accept. I'm not convinced that it's not Subaru problems that should be fixed under warranty.
So better be prepared for expensive 50,000 km services. But if it does what it did to my car then there is some compensation. A $900 service is in BMW territory.
An update - I wrote the original comment. I've just picked the thread up again and was intrigued that two people stated that they could have been reading about their own car.
I've just turned 70,000km and the car is 3 yrs old on 24th May 2007. After the 50K service when things took a turn for the better they have now detoriated pretty well back to where they were before - with the added feature that quite often when slowing down it clunks at 30kmh - as a couple of other writers have pointed out. I can't recall that it did this previously. The changes from 2-3 and 3-4 have returned to the 3500rpm range.
I'm doing a fair bit of travelling between Brisbane and Hervey Bay hence the increase in mileage. I replaced the Geolanders at 60K - they probably had 10K left in them, but the roughness was getting to me. I'm now on Bridgstone Potenza G3's ($263 each) but they are remarkably quiet and handle extremely well - most happy with them.
If the 100K service is $1500 then I may dump the car before then - that's ridiculous! I presume that they change belts the plugs and I understand that they have to drop the motor to get a couple of them out. The Cressida had platinum tipped plugs that were supposed to do 100K, but they seem to fade badly after 80K and cost about $25 each. It still doesn't add up to $1500 though.
Currently I'm still OK with the car and can endorse the writer's opinion about "grunt". Try some Shell Racing V-power or whatever!!! the 100 octane stuff and it makes the car perform even better on the highway.
I'll try and be a more frequent visitor to this site in future.
I own a 2004 Subaru Outback Wagon with the 2.5 L engine and I also have similar problems with the transmission. I bought the car with 33,000 miles (53,000 Kilometers) and it now as 40,000 miles (64,000 Kilometers).
I have noticed the transmission downshifts too soon from 3 to 2 and when it does I feel the transmission clunk into gear, making the car slow down and the engine rpm jump up.
I also noticed there seems to be play in the power train when the car is in overdrive. When I pump the accelerator (or just quickly let off the pedal), I can feel the play in the transmission or drive line. To best describe the feeling, it feels like I am driving with a manual transmission where one can feel the play in the gears.
Fortunately, the dealer just said they are honoring the 5 yr, 50K warranty so I should find out in a few days if they offer the electronic patch which would hopefully solve/help the problem.
I hope this helps future readers or car buyers. If anyone has any ideas or solutions, please fill me in!
Back again! I was the original contributor. Still have the beast after nearly 6 yrs and 120,000 clicks.
I just spent A$3000 on a new aircon compressor and condenser. The compressor was shaving metal particles off the rotor, and pushing them through the system and clogging the condenser channels. When the air con mechanic found out the price of a new one, he nearly flipped and looked everywhere in Australia for an after market one. Eventually had to go to Japan for an original one - after 6 weeks and summer was really starting to hit. They are only a small compressor and apparently have very fine tolerances to get the performance - anyway that's what I was told.
So after $2400 for the compressor - as against $600 for a Ford or Holden - and $400 for a condenser and another $300 for labour, I'm resigned to keeping the car to get some of the value back. I still like to drive it, but the wife takes the dogs to the beach in it, and the grandkids have a few scratches down the side from their bikes and trikes, so it is now really a family hack.
By the way, I moved away from the dealer servicing and dealer charges to a private mechanic and more realistic charges, and it now performs like it did when new. I guess the dealer changes the oil and filters (and I caught them out on the oil filter as it is behind the battery) and nothing else. This new fellow tunes it and tells you things that need to be looked at.