The issue is the radiator's integral transmission oil cooler located inside the bottom tank of the radiator. This is a design that is used by all manufacturers on auto trans vehicles and has been used for decades. Calsonic makes the radiators for Nissan. On 2005-2010 Pathfinder, Frontiers and Xterras, there were a lot of radiators that had a seal fail in the integral cooler that allowed coolant/ATF cross-contamination. The coolant gets pushed into the cooler line, back to the automatic transmission, where damage to the transmission occurs. There is also an air-to-air auxiliary transmission cooler located in front of the A/C condensor, behind the grille, on North American models. Aftermarket radiators, the revised Nissan radiators, and those radiators in non-US models (ie Pathfinders make in Spain for the European market) are not known to have this problem. While many owners feel the radiators should have been recalled, one was never issued. Nissan did lose when taken to court over the issue in NY State which prompted them to extend the radiator warranty (again) and limit damage expense, depending on mileage up to 100,000 miles.
There are two fixes for this issue. One is to replace the radiator as preventative maintenance. Choices vary from the $450 genuine Nissan replacement, aftermarket replacements (many made in China) as cheap as $74 on Ebay or an all-aluminum radiator. I heard Griffin radiators had an all-aluminum for around $550. Stillen Motorsports was going to offer one for $350, but I'm not sure if it's available, yet.
Second option is the "bypass method." This involves disconnecting the lines to the cooler and capping them off, then re-routing the cooler lines so they bypass the radiator and utilize the auxiliary air-to-air cooler only. As far as the ATF, it should be operating in the 175-210 degree F. range. Those that have installed temp gauges on their tranny fluid have see temperatures around 150-165 degrees F. While this is a little cooler than spec, there haven't been any issues noted so far; there is really no need to add a second auxiliary cooler. The concern is in very cold temperatures, especially for those that live in the northern US or Canada where temps can drop below zero, or for those that haul heavy loads. Besides offering additional cooling, the radiator's integral cooler also warms the fluid, which makes it a better regulator of the ATF operating temperature.
Radiator replacement is a bit tougher in these Pathfinders than it was in the earlier WD21 and R50 models. Labor guide gives about 3.0 hours, which is about right. Part of the problem is that the A/C condensor shares the lower mounting with the radiator, so it has to be suspended to remove the radiator. Also, the R51 radiators have side brackets with mounts, that have to be maneuvered around the A/C lines going to the condensor. For my '06 LE, I chose to get an aftermarket radiator off Ebay for around $92 and free shipping. It was made in China, but quality appeared to be very good and I had no issues with fit. The only difference I found was that the drain petcock was a different pitch thread than the OEM, but it came with a new one, so it was a non-issue. So far I have two years on it, without any issues. I also replaced the foam seals on it, which were inexpensive from Nissan. Many have chosen to go with Spectra Premium radiators, which run about $120, which are based in Canada, but I believe many of their radiators are made in China, as well.
If you choose the "bypass method," which I did in my friend's 08 SE, you'll want about three feet of 5/16" automatic transmission cooler hose, two 5/16" vacuum caps, a can of Kooler Kleaner to flush out the cooler in the radiator before you cap it off and some small hose clamps. There are two different methods, depending on year, as the auxiliary cooler was moved from the right side, on 05-07 models, to the left side, on 08-and-later models.
If the dealer is willing to replace the transmission with a Nissan reman. unit and replace the radiator, I'd be happy with that! I wouldn't do the bypass as you shouldn't have the issue with the new, updated radiator.
As far as Edmund's statement that you won't have any other problems, that remains to be seen. Some people don't, but many people do have other problems, especially in the 05-07 models, and to a lesser extent the 08-10 models. If you're lucky, the main problems have been addressed by the previous owner(s). Another big problem is the upper timing chains wearing through the upper tensioner "feet," as they are called. The "feet" are a plastic guide on top of the tensioner plunger. Supposedly, Borg Warner, who makes the timing set, made the chain links too sharp on the upper timing chains, which causes them to cut into the "feet." When they get down to the hardened steel plunger of the tensioner, it makes a loud "whine" noise, similar to a bad P/S pump noise. This is usually first heard at start-up and during acceleration and gets louder over time. This can occur as low as 25000 miles or well over 100,000 miles; there is no common mileage interval. The upper chains and tensioner "feet" have been updated, but replacement requires removal of the engine front cover, which is a significant job that can run $1200-2000 at a shop.
Other problems include bad electrical grounds, fuel pump sending unit issues, squeaky hood latches, rear control arm bushings that seize and prevent wheel alignment adjustments, evaporator drain leaks into the passenger compartment, bad oil gauge senders, noisy serpentine belt tensioners (a tensioner and belt kit was developed to address this), bad ECM relays, leaking coolant and/or A/C lines to the rear heating unit, front sway bar mount bushings that collapse and cause a knocking noise (updated bushings available from Nissan), temperature control inconsistencies...to name a few. Also, many find the rear springs to be weak and ride unsettled, so a common upgrade a rear Bilstein HD shocks combined with Airlift 1000 air bags.
A worthwhile site for R51 info is:
The Nissan Path :: The World Wide Nissan Pathfinder Owners Forum :: R51 / R50 / WD21 :: www.TheNissanPath.com