I owned a '95 T5 and now own a '98 T5 - the transmission in the '98 (and '97 I think) are definitely improved over earlier ones. I used to trip the flashing arrow on my '95 by shifting to 3 - no such problem and less clunking on the '98.

However, my '05 V70 2.4T has a completely different transmission - much smoother. I like driving both though.

I actually bought my '98 because I was in love with the memory of the lush seats in the '95. The '05 seats are OK, but nothing like the ones that they used 2 cows per seat to make.

The plastics in the '98 interior are subpar, and I believe were also used in more critical areas such as the dash mounting. The plastic is known to degrade (aka crack), causing an annoying dash squeak.