Odd that an '89 only has 2 wire trans harness.
Earlier A4LD transmissions had an electric solenoid inside to lock torque converter(TCC), this was computer controlled and requires 2 wires, 12volts and a Ground that the computer controlled to activate solenoid.
Overdrive(OD) shifting was control by a Vacuum solenoid hooked to the engine.
I thought it was '88 when A4LD got added electric solenoid for OD shifting, these would have 3 wires, 12volt and then 1 Ground each for the TCC and OD activation, both computer controlled.
You will need the 3 wire connector for the trans in any case, to keep TCC control.
You could add a switch on the dash to control OD selection, like an "OD" button.
It would just be a ground hooked to the 3rd wire, so 1 wire from that trans pin to dash, an on/off switch hooked to dash ground.
Good diagram here for the connector:
http://www.ford-trucks.com/forums/1...e-wiring-help-for-the-t-c-lock-up-switch.html
And as said in this link you don't need the OD lock up, trans will shift into OD on its own, it just won't stay in OD like it should for best MPG, it won't hurt anything though.
And other option would be to get a newer computer with 3 wire harness, but a more expensive option.
Not sure on "other sensor" unless it is located next to shift linkage, if so it is an NSS(neutral safety switch), it would have reverse lights and a pass thru for starter motor activation, so starter would only work in Park or Neutral.