Sometimes the transmission will not shift

Worn parts / overheating /low fluid/ clogging filter

There could only be a couple possibilities for this to happen. First, with standard shift transmissions the shifter linkage could be worn being that it only happens with 3rd and 5th gears, as this shifter slide works for both of these gears. If this is the case it is only a matter of visually inspecting the linkage for worn or broken parts and replacing them or adjusting the linkage which is the inexpensive fix that I hope you are looking at. Second, This could be caused by the syncronizers within the transmission are going bad/worn or broken. In either case the transmission will need to be removed and repaired or replaced which is the expensive route that I pray is not the way you have to go! I hope that this is some help.

my guess is its not electric shifted, (what trans model is it)
so step 2 in the FSM book says.... and i paraphrase
step1 is stall test (my guess passes in 1st and reverse)
step 2, line pressure test?
if that fails, tranny is bad.

It isn't when the engine gets hot, it is when the transmission fluid gets hot that the slipping starts, due to wear of the clutches and gears inside the transmission.
First, check the fluid level to make sure it is full. If it is low, bring fluid level to full and see if that helps.
About all the owner can do with slipping automatics is trying a transmission fluid and filter change to see if transmission revives and stops slipping. The bottom pan is removed, fluid (about 6-8 quarts) is drained, and a new filter is installed before the pan is replaced with a new gasket, sealed up, and fresh fluid added. Sometimes it helps. Sometimes the transmission is worn too bad to help, and you are left with looking for a replacement transmission.
Check the fluid level first. Good luck.

Your Trans is definately slipping even though it doesn't seem like it. If this just started, DO NOT, I REPEAT DO NOT!!!! drive the car in this state, even with the SES light off it's still happening. You WILL have to get a rebiuld if you continue to drive it like this. Here's the deal of EXACTLY whats happening.... and no, an auxillary cooler won't remedy this problem.

(BEFORE SES LIGHT)

#1 - Valvebody gets stuck closed, insufficient tranny fluid to cool transmission.
#2 - Trannsmission gets HOT due to insufficient fluid, and begins to slip (explains lack of accelleration power)
#3 - Computer detects slip after about an half hour of highway speeds and engages the FAILSAFE which applies MAXIMUM LINE PREASURE to push the fluid to the transmission although this does not work due to stuck valve.... MAX LINE PREASURE is actually what causes your harsh 1st-2nd gear shift... before this it SEEMS to run perfectly fine although it's not...
#4 - The First it detects it in a running cycle, the computer just activates the FAILSAFE with harsh shifting WITHOUT the SES light... however the SECOND time it detects it in the next running cycle...then...

(SES)

#5...You get an SES light with the code P1870 (Transmission Component Slipping or 4X4 Transfer box)... PLUS FAILSAFE mode which activates harsh 1st-2nd gear shifting...
#6 ...You turn car off, turn car back on and everythings running fine??? Nope, problems still there, you just resetted your computer which deactivates FAILSAFE mode until it detects another slip....

You will COOK your transmission if you continue to drive it like this... Trust me I have a 97 V6 with an A4 (Same tranny) and had to get it rebiult because it got so hot in there it fried all the shift solenoids, Ironically I just got it out today. The Sonnax Kit listed above is the common remedy to this issue... After the kit's installed the problem will never happen again...

I would check the engine timing and the ETC switch.

Well the simple answer is no, your not hurting it. I would however be doing a tranny service every 6 months or so, to make sure the fluid is always fresh... The tranny will settle in and will take its time sometimes, but as long as it isnt slipping its all fine... If a shiftkit is available for your tranny it might be a thought... Just keep the fluid level always topped up and so your services about twice as often as needed...

Have you checked your tranny fluid level, also does it smell burnt or really look brown or milky?

seems to me , the 3rd gear shift range is slipping.
You probably have internal failure.
You should take to transmission shop

Had the same problem. had the soiniod body changedbeginning of winter. Tranny shift Smoother but problem can back the next spring but less often then before.

Noticed that it was happening on hot day and after driving no more than an hour. Noticed that it was happening also in stop and go traffic.

Sometimes just putting the Tranny at Park and stopping the engine on a RED light fixes the problem.

I haven't gone back to the Tranny Shop.