I believe you're doing it right- the OD wants to be engaged (i.e. clutch out) when shifting into it, though of course it's probably bad for it to shift under heavy throttle. I always tried to apply neutral throttle for a second when shifting into OD on an old one we had.
The unit does seem happy if you clutch as you disengage it, however.

NOw for the observant reader, the subject line was about an 88 240... which had the M47 true 5-speed if it was a manual trans. So that means the car in question is probably an automatic, in which case it's all a moot point.

But one point that IS relevant, is that you should obtain and read the owner's manual for any car you have. It's got important things in it that you never knew about or noticed before, and often times can explain things better than anyone can on this forum. The original question here would easily be answered by reading the owner's manual. Junkyards are a great source for original manuals if one is needed.
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Rob Bareiss, New London CT ::: '87 244DL/M47- 221K, 88 744GLE- 202K, 91 244 181K, 88 244GL 145K