I also had the same issue with my 2003 S-type R. I explained the issue to the dealer and told them I would demonstrate the issue for them. They had the car for a week and tried to reflash the transmission module three times. They finally gave up and replaced the module because it wouldn't accept the flash. The problem is much better now. The hesitation (when the car is in between 1st and 2nd gears) is much shorter now so the engine doesn't have a chance to rev and then engage 1st with the dreaded "thunk".