I am having problems with stalling when going into gear. My engine idle speed and timing seem ok so Im wondering if not hooking up the vaccuum line to the trans could cause this problem or is the modulator for shifting purposes only?

Is there an open vacuum port somewhere on the engine? I doubt not hooking up the modulator is going to affect the engine. It's used for transmission shifting.

The modulator controls the line pressure and shift points so it won't help. Joe is probably right about the vacuum leak. Either that or your engine is cammed up to the point that it won't make power at the converters stall speed.

What is your idle speed in park and in gear?

disconnecting the modulator equals troble with the tranny down the road.
hook it back up

Very true... shoulda said that in my initial post.