Uhhh, sounds like clutch. You are bound to slip it a bit with every shift, but maybe you are easing it in too much and it's burning a bit to create that smell.
__________________ theJam
2004 40th Anniversary Mustang GT
Mustangtuning.com O/R X-Pipe (Pypes), Tri-Ax Shifter
1 Alpine 9835 Head Unit, 2 Pair Alpine 5 1/4" Round Component [STOLEN]
2 Rockford Fosgate Type RF X3 Amplifiers (1 Mid/Highs, 1 Sub) [STOLEN]
1 Rockford Fosgate 10" Power T1 Subwoofer - Custom Sealed Box [STOLEN]
All new wiring, custom brackets for speakers, custom trunk modifications, One-touch window controller for the passenger side | 
05' mustang smell 
