The MY07 and MY08 Outback XT 5 speed cars have VDC so it can work with the manual. The limited slip shoulnt have much effect on it as long as the VDC is turned on. Once it is off you will be spinning the inside rear like the older(ie 98)2.5RS. My only real concern with VDC is the ability to turn it off and leave it off. The old systems would automaticlly turn back on when road speeds were over 38 mph. Ive been told that the perfomance cars(ie Spec B and 3.0R Legacy) dont turn back on until the car is shut off.