I used an 8mm socket/ wrench. It's a tight space since the exhaust pipe is in your way (at least on a Mark VIII). Jack it up, park it in neutral, set the e-brake, disconnect the sensor harness, two bolts out with an 8mm socket/wrench, match the "neutral position" on the new sensor (you'll know what I'm talking about when you see it), reverse installation. Easier said than done, but overall, a 30-45 minute job.
Two things: do it on a cool car. The exhaust pipe is right there!
Second: buy the part from Autozone- it's only $22. I think NAPA wanted more, and forget about what Ford charges for it!. Just ask for a "neutral safety switch". They're typically in stock. Changing this sensor helped fix a shifting probelm I was having at cruising/ highway speeds...
See the biggest of the holes in the center of the sensor? That's the "neutral position" I was talking about. Make sure the position of the notches on the new sensor matches the old one. This tells the computer that the transmission is in neutral.