Transmission problems

Hi,

I drive a '90 Corolla and I was just hit by a problem that my car brought to me on the way back to school the other day. While driving my car started making a loud wherrring noise and then it began having trouble accelerating. Later on it actually stopped accelerating two times in which I was forced to pull over on the side of the road, sit, and then go again a few min later.

Now what seems to be the problem is that the transmission is running at high rpms and does not want to switch out of 1st gear. The transmission fluid is full, although it is a little thin, so what else is the problem?
Does anyone know what is going on with my car?
How much you would guess that it would cost to fix the problem?

Thanks a lot,

Jason