While underneath the truck I noticed a rubber plug on the bottom of the automatic trans near the front. The plug was half in half out. I stuffed it back in...no harm done. But what in the heck is it for?

It is on a 2001 4.2L V6 w/auto.

 

If you're talking about a silver dollar sized black plug, it gives access to the torque converter drain plug. It's just there to keep dirt,mud, rocks and what not from getting in there.