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What I've read is that the increases available from the 4.2 via chipping are very minimal. Since there is no boost to manipulate, I doubt that chipping would approximate the output from either of the more powerful versions. Without a new exhaust, etc, my understanding is you won't get much at all. There's also a Tip chip, that has been used to improve performance via remapping the Tip. I don't know how these compare to the new sport setting. Could be redundant.
Because to the negligible power increases available via chipping on the 4.2, (As contrasted to the 2.7T.) I doubt it would put any unacceptable stress on the drivetrain, or any other system. I think I remember reading that the 4.2 uses a different and more robust tranny than other A6's. Word is that too much torque can fry them. I don't the limits on the 4.2's tranny, but supposedly slightly more than 300 lb.-ft is the safe limit for those in 2.7T's and 3.0's.
About the biggest major improvement in performance would be getting rid of the 130mph limiter via a new ECU. Want to drive your 4.2 at about 150+? You probably could. (Make sure you've got tires appropriately speed rated first!)
Don't know if you visit AW. There are some very knowledgeable folks who could give you more and more certain information. Try this:
2001 Honda Prelude Type SH/ 2011 BMW 328xi / 2011 Honda Pilot EX-L w/ Navigation
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