1989 olds 88 transmission problems

This car has the 3.8 v6 and 4 speed auto trans. when the car is first started and put into drive it hesitates then goes in. this only happens when it hasn't been driven in a day or so. When the transmission goes into reverse, it lets out a loud clunk and the car shudders. It has 114,564 miles on it. It also only gets like 9 mpg in the city. It mainly gets driven around town, but 9 mpg? What's wrong here?
Any help would be very appreaciated.

When was the last time the transmission was flushed? It should be flushed every 50k or so...

As for the poor fuel economy it might be a bad O2 sensor. Also, you may need to replace the air filter, plugs, wires, fuel filter if they're getting old. You could also put some HEET or similar product in your tank to clear up the injectors.

Basic maintenance stuff...unless your service engine soon light is on...

BTW, if you end up replacing the O2, DO NOT get a Bosch....bosch and GM DO NOT get along. Same goes for plugs and anything else.

HTH

I agree with the Bosch part. Leaned that the hard way when doing plugs and wires. I have a '86 RB that has trans problems. Mine clunks around when you first start to drive it and go into reverse and then into drive say when pulling out of the driveway. Also, it feels like the trans is "slipping" between 40-50mph. I think its a seal/gasket on the trans. Not 100% posative though (need to find out before I go back to school). I also have a intermittent SES light. Seems to only go on when coming to a light or sustaning a speed that not over 55mph. I think its a bad O2 myself. Anyone clear up one of those things? Will an O2 throw a intermittent light like that? Sad part about my car is that it only has 50k original miles on it.

Sorry if I hijacked this thread, but my hesitates as well. So when I go ahead and do a seal/gasket on the trans, I'll post up if it helped or not.