A friend got a 00 Impala 3.8L with blown trans, he found a parts car with a known good running trans, took that trans off, put it on his car. Put in fresh fluid, it leaked right where the plastic cover for flexplate access. It only leaked when it is running. It was more of dark red.

Took it off, decided it was the seal on the trans, replaced that. put it back in, fresh fluid again, started it up, it still leaks... Now the puddle is black, dip stick is bright red like fresh fluid. We are concerned why it is leaking and now that its black.

What could it be? could it be the seal ripping from struggling to get the trans to align and mate it with the convertor on the motor? Or could it be the trans is not right for this motor? Trans from part car is 3.8L too.

Was the converter emptied before it was installed? Could be old fluid still in it; as far as the leak, is the converter housing possible cracked?

I never removed the converter, just left it on the flexplate so yeah it still has the old fluid in there. Housing do you mean the bell housing? Its leaking from that area, no cracks were visible. No trans fluid around outside the converter or on flexplate, except for the bottom from when removing the trans. then the fluid runs out of it.

I have worked on several manual transmission before, never on automatic. Is there a special method of reinstalling a auto trans?

this is your problem, the converter needs to come out with the trans...and be installed into the trans before the trans gets installed.  yes you probably tore the converter seal trying to line everything up.

you normally unbolt the flex plate from the torque converter.
leave the torque converter in the transmission.
they even make a piece depending on the transmission to help hold the converter in place so it doesn't slide out.

once the transmission is in place you bolt it up to the flex plate on the car already.

honestly not sure how you got it out with the flex plate still bolted up.

or did you leave the old flex plate and torque converter on the car?
do not reuse the torque converter from a grenaded transmission.
you also need to flush out the transmission lines and cooler, or you may grenade another one.

fluid from the transmission goes through all of that and could leave parts from the bad transmission inside the lines.
once the new transmission starts to circulate stuff it will get that gunk in it and eat itself.

Never seen that mistake made before.  Your best bet now is to quit all running of the engine and pull tranny back out.  Replace front seal and install torque converter properly before you burn the pump out of tranny.

odds are good you destroyed the pump already