When a trans has freewheel first gear (or freewheel second gear, or both), it means that the trans will not apply engine braking when you decelerate in that gear. It's analogous to a bicycle (like a 10-speed) that has no brakes on the crank. When you pedal forward, the bike moves forward. As you are riding along, you can stop pedaling on the crank and coast, even pedal backward if you want, all the while still moving forward. Well, freewheel gears on a automatic tranny are the same way. When you want to drive, you will put it in 1st gear and give it gas. The car will move forward as normal. But, let's say you are in first gear and going along about 20 mph. You then let off the gas, and what normally happens is the car will slow down because of engine braking. If you have freewheel gears, then if you let off the gas in 1st at 20 mph, the car will still coast along at the same speed (on a flat road), the engine will go back to idle, and you will not feel any engine braking.
What this means is, with freewheel first gear, first gear acts like a diode, where you only feel the response in the car in acceleration, not deceleration. Going along at 20 mph in first, I can give the car gas, and the car will not respond to my input until I reach engine rpms that will be equal to or greater than the rpms for first gear at that speed.
The net result of this is, I can put the car in first gear at any speed (100 mph if desired) with no ill effects, because there will be no engine braking. What I like to do is, if somebody wants to race from a roll, I will just put the car in first gear, let the car idle in first gear while we are coasting at 30-40-50 mph, then when we are ready, I just mash the gas. The rpms will suddenly jump from idle to whatever rpms will catch in first gear at that speed (5000 rpm? etc), get a good leap ahead of the other guy when the rpms engage me to accelerate, then shift once I reach redline. By the time the other guy sees what happened, I am a good three cars ahead! Hehe. It is always so funny when the other guy is buzzing his car at 5000 rpm waiting for us to go from a roll, and my car is just idling along, then I stomp it and leave him.
Anyway, some guys like to do both 1st and 2nd gears like this, but I like to have SOME engine braking ability for daily driving. Or course, 3rd gear will (or rather should) always have engine braking.
It's a lot of fun guys. It's all in the tranny, too. I'm no trans guy though, so I can't say what does it mechanically inside the trans. But give it a try! It's one of the most enjoyable aspects in driving my Cuda.
Jason
