Mechanical temperature gauges use a one piece copper tube between the gauge and the temp sensing bulb. You cannot separate the copper tube from the gauge or the sensing bulb, if you do; the gauge will no longer work.
Electrical temperature gauges use a temperatures sensing element with a sense and ground. The ground is often built into the metal shell of the sensing element. That leaves only a single electrical wire to run back to the gauge. The wire size or routing is not critical and it can be in two or more pieces (as in a wiring harness) if necessary. The gauge itself has one connection to switched power and the other to the sensing element.
Both mechanical and electrical gauge will require power and ground for the illumination circuit. Be sure to ground the gauge lighting wire to clean, shiny bare metal. Connect the other wire from the gauge lighting to a light brown/red wire on the radio wiring harness. There are 2 connectors in the radio wiring harness, but only one of them has the light brown/red wire you need for gauge illumination. Solder the gauge lighting wire to the light brown/red wire on the radio harness and cover the soldered joint with heat shrink.
How to solder like a pro - Ford Fuel Injection How To Solder Like a Pro a must read for any automotive wiring job.
Electrical and mechanical gauges have the same accuracy. Mechanical gauges will work without the car's ignition switch in the ON position. It is easier to install an electric gauge if you aren't an electrical dummy. The mechanical gauge has to keep the copper tube in one piece and not kinked or sharply bent.
Both electrical and mechanical gauge will need the temperature sensing element installed in the lower transmission drain plug to insure that they are always immersed in the transmission fluid.
For trans temp gauges, I like to put them in the output circuit (fluid line) from the trans to the first-line cooler or heat exchanger. This shows me the hottest fluid in the system. You can use a manifold from Autometer if desired.
I prefer elec trans temp gauges because as JR noted, the capillary tube length is a restriction otherwise (my last install used about 8' of wire, so a cap tube would not have worked, as most are 6').
You can also put a sender in the pan itself.
If you have a 94-95 EEC or later, you can use the EEC to view TOT (and datalog it).
To nip issues in the toosh with E-senders (especially trans temp E-senders, where they are not mounted in grounded receptacles), I recommend using a dedicated ground on the sender body itself. Otherwise readings can be off. Look for a sender to ground reading of less than 1.0 Ohm when you're done.
I recommend using a dedicated ground on the sender body itself. Otherwise readings can be off. Look for a sender to ground reading of less than 1.0 Ohm when you're done.
Ohm-out your sender body and see what the reading is. There are myriad variables, like thread sealer on the pan bolts, sealer on the pan where you install the sender, motor grounding itself, etc.