Where is the output shaft speed sensor located on a 1998 Audi a4 2.8 quattro

SOURCE: check engine light code P0720...failed output

The output shaft speed sensor lets the computer know how fast you are going down the road to help it pick gear change points..
Yes, you can buy one and replace it.
First check the wires and plug going to it.
Your manual will probably describe its location better than me, but it will be toward the rear of the gearbox and usually has a small gear on the end that meshes with a mating gear on the output shaft as you put it in.

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SOURCE: Dodge Durango 1998 5.2L Output Speed Sensor code P0720 Location

Its in different locations depending on if its 2wd or 4wd. For 2wd its in front of the drice shaft or for 4wd its in the tranfer case, just look for a white shape like box with wires plugged into it and you need a socket to remove it, iam not sure how much it is to replace as the cost varies at different shops.

SOURCE: Location of Speed Sensor 1998 Ford Explorer XLT

polarcycle is right but there is a speed sensor on the drivers side top of the trans. toward the tail shaft or transfer case. there is as well a sensor inside the trans. itself that is mounted on the web. behind the overdrive band and drum.