Here's my take on it:
Floor it. If you floor it, whether you are on Manual or Auto you will redline. Personally, I switch to manual when I want to race. I floor it and shift when I redline 6.5k. I took the car past redline once (I wasn't paying attention to my RPM's) and at about 7.5k the rev limiter kicked in. I wouldn't recommend doing that...
I don't think you will "hurt" your transmission by rev'ing so much, but you will definately make your engine work alot harder than if you drive "normal". Consequently, that may put you at "high risk" for blowing out your engine.
As far as the tranny goes... one way you can damage this is by downshifting incorrectly. I usually downshift when I take a turn. Asuming I'm at a light and switched to manual mode, I floor it and redline through all the gears. Once I'm at 3rd or 4th and I'm approaching a turn, I brake and downshift to 2nd, then floor it again (watch the rpm's).
That's basically it. Having a sportshift is okay, but you will loose to a manual. If you had two drivers with the same driving skills race an auto (sportshift) and manual, it wouldn't be a match. For starters the manual has 5 gears as opposed to our 5, and our cars are heavier as a result of having the auto tranny.
If you were to take the same scenario and race a sport-shift with a standard auto, you might have an edge on turns, but other than that it would be a pretty even match.
That's my $.02
