The 2004R only had about 10 year run. Parts and availibility may be an issue. If you already have one, go for it. Personally, I would go with the 700R4. GM, only recently quit using them in their trucks. They'd been using them for over 30 years AND continually improved them. Most parts from the 700R4 and 4L60 line are interchangable, so upgrading isn't an issue. Plus, there is a ton of hardcore parts out there. If you go the the 700R4, I would recomend a shift kit from TransGo or Superior. I used a kit from TransGo in my truck, and it made all the difference int he world!
With the 261, I would stick with a 3.90 or 3.73 gear ratio. I've had 3 vehicles with a 3.42 rearend and they ALL could've used a little more RPM going down the highway.
Check these sites out:
http://www.transmissioncenter.net/http://www.superior-transmission.com/Product_Page.cfm?ID=121http://www.northernautoparts.com/ProductModelDetail.cfm?ProductModelId=27868http://transgoonline.com/products.php?pr...ddcountview=Yes
