OK - wasn't clear - sorry 'bout that. It IS and auto - I"m sure of it.
SLip only occurs for about 3 seconds when cold and first starting - after that it's fine. only 106K miles on it so hate to do a total rebuild already
Good thing I had my crystal ball charged.
Slip-hesitation-lag in the transmission when it's cold is common with my '01, and with other similar year trannys (from research on yotatech, ttora, and 4x4wire). Now if it occurs once it's warmed up, or gets worse, obviously there is a problem. It's very noticeable below freezing, but warms up and subsides after a few seconds.
Since you asked about "upgrades" I mentioned a tranny cooler. It won't cure a slipping problem (which you don't have), but it sure as hell won't hurt. This is something easy to do in your garage, and it pays dividens in preventative measures. For a quick how-to write up, looky here
http://www.parksoffroad.com/tacomamods/trannycooler/trannycooler.htm
The reason I mentioned the VB "upgrade" was to demonstrate that there is no other real tranny mod for ours. There are no shift kits like other makes, and unless your slapping in a supercharger, there's no real need.
Unless you're loosing oil around the input/output shafts, I'd be hesitant to replace a lip seal. Check your fluid level, color, and yes, smell. But the slip/hesitation when cold is normal. Try letting it warm up a few seconds before moving, and keep the ECT on while in town. It will shift at higher rpms and is actually better for the tranny then forcing it to shift smooth like a luxury car, just not better for the mpg. But that is what a shift kit would do.
Hope that helped a little, sorry for the dissertation.