I bought a 2.5 rs a month ago and i love it, but the only down fall is that it has an automatic transmission. My question is if i switch it with a 5spd manual do i need a new rear diff. and if i do what would be a good one to swap it with. thanks for the help.

no you just need a tranny that matches the rear diff

iirc an auto rs is a 4.44 rear end so either you would need a 4.44 tranny (kinda rare) or a new diff

Yes you will. The manual and automatics have different final drive ratios.

Any EJ-series tranny will fit fine.

IF YOU WERE GOING TO HAVE SOMEONE ELSE (SHOP) DO IT FOR YOU, you need:
Manual tranny and correct rear diff
Example~
*4.111 Final drive ratio: Impreza RS-tranny + Impreza RS rear diff (the whole unit/core) OR RS ring and pinion gears
*4.111 Final drive ratio: Impreza RS-tranny + Auto or Manual tranny MY90-MY91 Legacy rear diff (the whole unit/core) OR MY90-MY91 Legacy ring and pinion gears
**3.900 Final drive ratio: Legacy Outback tranny OR Impreza L-tranny + Impreza L rear diff (the whole unit/core) OR Automatic tranny MY92-MY93 Legacy rear diff (the whole unit/core) OR MY94-MY99 Manual Tranny Legacy rear diff (the whole unit/core) OR Impreza L ring and pinion OR Automatic tranny MY92-MY93 Legacy ring and pinion gear OR Manual Tranny MY94-MY99 Legacy ring and pinion

The Impreza L and the RS doesn't differ in gearing but ONLY in the final drive. My tranny is acting up and the syncros aren't doing so good so I'm going to find myself a MY96-MY99 Legacy Outback 5spd tranny in replace of mine.

**The Legacy Outback tranny has the same ratios as the RS and L in gears 1-4 but the 5th gear is shorter than the RS and L possibly for towing purposes. It runs a 3.900 final drive.
MY96-MY99 Legacy Outback 5th gear ratio: .871
MY93-MY01 Impreza L / RS 5th gear ratio: .780

IF you don't want to touch the RS rear diff, then you'll have to either get a 1st generation MY94-MY99 JDM GC8 Type-RA tranny, it runs the 4.444 front final drive ratio OR get the 4.444 final drive from RalliSpec, which will cost you some $$. I recommend the Type RA tranny is you can find one.

IF You plan to have it done by yourself, getting the tranny core, and correct rear diff core will save you more time.
IF you plan on changing the rear ring and pinion gears, you need a dial guage to measure the amount of lash or bind or whatever they call it. You also need specifications on how much lash or what not is recommended. I have some PDF files on this but I've only skimmed through it. I'm going to purchase myself this dial gauge sometime.

I'm not sure if you need a new flywheel or not. You might just have to take off the torque converter and replace with a clutch and pressure plate.

SIDE NOTE:
I've taken out my rear diff 4 times now and it's not too hard to take out. We can simply take it out and put in a different rear diff unit and put it back together in a little over 1 hour. The tranny we've taken out for a new clutch and that took a little longer being the first time we took it out. Must keep ALL nuts and bolts organized!

EDIT: ...spelling....and more info added, re-read if you have already read...

you will also need a pedal box...

you will also need a pedal box...
Yes, of course! And the clutch cable or clutch line depending on transmission type. MY00-MY01 uses a hydralic clutch system to engage and dis-engage the clutch from the flywheel.

I would assume the driveshafts are the same unless someone says something otherwise.....

I added some more info to my post above so if you'd like to re-read it, you'd understand a little more.

http://wac.addr.com/auto/obs/lsd/lsd.html