The S only appears when you're in E (economy/automatic) mode and I think the manual says that's Single Gear drive mode... which is kind of strange if you ask me since it doesn't really mean single gear since shifting DOES occur. I think all it does is that it won't upshift past the gear that you chose. So S3 will never go to 4th, but it can/will drop back to 2 and 1 if you're going slow enough.