To the OP, you can use the RPM Calculator (link below) to determine which gears are optimal for any size tire you decide to install. Your Torqshift has a "Transmission High Gear Ratio" of .71. Just enter the data into the link to determine the RPM's. As for tires sizes, I have not seen many 38" tires but I have seen many 37" tires. Therefore, I used 37" and 40" tires in the examples below. I used an average highway speed of 65 MPH but you can adjust that to any speed based on your area of the country and driving habits.

As for the amount of lift required to clear the tires, you most likely will need a minimum of 7" of lift to clear the 37" tires and 10" of lift to clear the 40" tires. Now, if you use Bushwacker "cut out" fender flares, you can reduce the minimum amount of lift to 2.5" (leveling kit) for the 37" tires and 4.5" for the 40" tires.

As for wheels, virtually all 37" and 40" tires have a minimum width of 13.5". You will need either a 9" (minimum) to 10" (preferred) wide wheel with back spacing in the 4.25" to 4.75". Therefore, your OEM wheels will not be compatible with these tires.

Here are the results with 37" tires:

Miles Per Hour: 65
Tire Diameter in Inches: 37
Axle Ratio: 4.88
Transmission High Gear Ratio: .71
RPM's: 2,047

Miles Per Hour: 65
Tire Diameter in Inches: 37
Axle Ratio: 5.13
Transmission High Gear Ratio: .71
RPM's: 2,152

Miles Per Hour: 65
Tire Diameter in Inches: 37
Axle Ratio: 5.38
Transmission High Gear Ratio: .71
RPM's: 2,257


Here are the results for 40" tires:

Miles Per Hour: 65
Tire Diameter in Inches: 40
Axle Ratio: 4.88
Transmission High Gear Ratio: .71
RPM's: 1,894

Miles Per Hour: 65
Tire Diameter in Inches: 40
Axle Ratio: 5.13
Transmission High Gear Ratio: .71
RPM's: 1,991

Miles Per Hour: 65
Tire Diameter in Inches: 40
Axle Ratio: 5.38
Transmission High Gear Ratio: .71
RPM's: 2,088

I have a 2005 F350 with the 5.4L engine and 4.10 gears. I have installed a K&N CAI kit and have a SCT tuner running a 93 octane "Performance" tune. Even with my truck empty, it doesn't feel strong at highway speeds until I reach 75 MPH / 2,225 RPM's. So, if you do any serious hauling/towing, don't be afraid to select gears that keep your engine's RPM's well above 2,000 to maintain good performance.

http://www.angelfire.com/space/slr/RPMCalculator.htm