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This is from the at.dsm.org site:

If you've read about manual transmissions, you know that an engine is connected to a transmission by way of a clutch. Without this connection, a car would not be able to come to a complete stop without killing the engine. But cars with an automatic transmission have no clutch that disconnects the transmission from the engine. Instead, they use an amazing device called a torque converter.

Just like manual transmission cars, cars with automatic transmissions need a way to let the engine turn while the wheels and gears in the transmission come to a stop. Manual transmission cars use a clutch, which completely disconnects the engine from the transmission. Our automatic transmission cars use a torque converter.

A torque converter is a type of fluid coupling, which allows the engine to spin somewhat independently of the transmission. If the engine is turning slowly, such as when the car is idling at a stoplight, the amount of torque passed through the torque converter is very small, so keeping the car still requires only a light pressure on the brake pedal. If you were to step on the gas pedal while the car is stopped, you would have to press harder on the brake to keep the car from moving. This is because when you step on the gas, the engine speeds up and pumps more fluid into the torque converter, causing more torque to be transmitted to the wheels.

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The torque converter is situated between the engine and the transmission, in our FWD based cars, the engine is turned sideways, but the torque converter location is still between the engine and transmission.

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How the parts of the torque converter connect to the transmission and engine.
 
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