On any of the 4R or 5R series transmisions, the controls are electronic, not mechanical as in the older models. That means that the valve body is controlled by solenoids that are in turn controlled by the computer, and not just fluid pressure, engine vacuum and rpm's as in the past. If the computer thinks it has issues (which is just about every day on the 96 and up Fords) it will stick the tranny into "limp mode" where it has some basic drivability but is not working correctly. Any long term driving in limp mode will ultimately cost you a new tranny as it starts to overheat the forward sun gear and melt the nylon casing for the sprag - turning your tranny into a piece of junk.
Resetting the computer by disconecting the battery will work to reset all the codes, but if it comes back, you are going to want to figure out why it did this in the first place. Mine took a reset every week for about a year and then it was new tranny time... I got mine from Phoenix also - the new one works good.
Use Mercon V or better - use Lubeguard (see another tranny post on this forum for a couple of sites that are helpful). ALWAYS change the converter - failure to do that is foolishness on a par with using drain oil scavenged from buckets outside a shop in your engine... Also, get a flush kit for the cooler - they hold tons of gunk - and that is often one of the reasons for failure. In addition, it helps on these newer models to add an additional filter on the cooler line. Do a search - this topic has been discussed to death on this forum.
In addition, the 2-3 flare can be caused by two other things that do not necesesarily mean that you need a tranny rebuild. First, check the torque of the valve body bolts. They are usually loose. Use a GOOD inch-pound torque wrench (no pointer types or "I'll just feel it out" stuff here!) and carefully retourque the valve body bolts in the required sequence. If that does not solve the problem you may have blown the paper gasket between the valve body and the plate.
Adding a Transgo shift kit is also helpful and it will mostly eliminiate that hunting for a proper gear stuff that these trannys seem to do best.
Hope that helps someone...