Since I do not like simply saying that something fails because it does, I have to explain why, so that it does not happen again, and if it does, what to expect of it. Customers don't like coming back for the same problem, it is crucial for a technician to diagnose the problem, and understand how it happened, instead of simply changing a part, and sending them back out to have the same problem again. (And possibly doing the job for free the next time.) Pictures are not the exact bearings, but very similar to those used.Let me start by explaining helical gears, and why they are used.
The helix design has many advantages and disadvantages as well. The most notable is the lack of noise produced while in mesh, this can be compared to a reverse gear, which is a spur cut and makes a lot of noise. These gears are also cheaper to make, and the two of those facts go hand in hand with auto manufacturers.
There are downsides however. They are not as strong when compared to a spur cut gear, and they also produce both axial and radial play when they are in mesh and engaged, and that problem needs to be corrected with good bearings/washers.
Having that said, it would be only correct to start with the clutch and flywheel, which is where the power enters the transmission. There are 3 major bearings that support the mainshaft, from front to back they are the pilot bearing, the input shaft bearing, and the rear support (angular) bearing. Many people do not consider the pilot bearing to be a major bearing, but this bearing has a critical function.

Pilot Bearing:
The role this bearing has is to stabilize the nose end of the mainshaft and clutch disc with the flywheel. If this bearing fails, this portion of the shaft will be able to play up and down as the disc rotates. If this happens it will quickly destroy the input shaft bearing, because the disc could now grab at an axis lower than the centerline of power flow, since the bearing is not longer doing its job, which places a great load on the input shaft bearing.

Input Shaft Bearing:
This bearing serves two purposes, the first is to provide the mainshaft with a bearing to preload against, (with the aid of cone washer and selective thrust shim) and is also an axial/radial support bearing for the shaft.

Rear Angular Bearing:
This bearing is a good design for helical cut gearsets, since its design allows for radial and axial support of the shaft and transmits the force received at an angle proportional to how it came in. The nature of helix gears are to push off (radial) and twist away (axial) from its corresponding gears.
Now on to the countershaft. There are also 3 major bearings that support this shaft.

Countershaft Clutch-side Bearing:
In the clutch case, we have a needle bearing, which is designed for radial load. (since it has no provision to load axially) This bearing could walk out of its hole and would have little effect on transmission operation because of the 3rd bearing I will explain.

Countershaft Transmission-side Bearing:
This bearing is located on the countershaft itself and is held in place by a 32mm nut. This is the bearing without the snap ring groove, and is also a radial type bearing (It does have a slight provision to provide axial support, but that is not the primary function of this bearing.

Countershaft Snap Ring Bearing:
This is a traditional caged ball bearing held in place above the last bearing by the 32mm nut, and similar to the input shaft bearing in design, as allows for axial and radial load support. This bearing is also responsible for holding onto the countershaft, since it would "float" if it was not held. This bearing keeps the countershaft in its place by way of a snap ring.
These bearings all have a role as you can see, and if one were to fail, it would adversely affect the operation of other bearings in the transmission. Since the helix design allows for thrust radially and axially, keeping the shafts in position is paramount for long lasting operation.
I will start with the one bearing that tends to wear out quickly, and is often overlooked. The pilot bearing. This bearing is a sealed ball bearing and allows both radial and axial force. It is very small, and can fail very quickly if shocked by the crank and the input shaft. Misaligning the transmission to the engine will also destroy it very quickly. When it fails it allows the input shaft to "wobble" or vibrate a small amount. If the friction surface is unbalanced it will permit it to engage the flywheel at an angle that is not centerline to power flow, forcing the load on the next bearing, the ISB.
Now the ISB has to take the load of a force about 6 inches away from it. And if you know how a breaker bar works, you know that the longer it is, the less effort, and the more power that can be exerted. If the clutch disc is off centerline, it will place the load on the ISB, but at a mechanical advantage to the clutch disc. (since the clutch is where the power is exerted) This allows more load to be placed onto the bearing, and quicken its failure. Once the bearing fails, the rear bearing takes the load. This bearing however, is more up to the task of supporting the shaft since it can still provide ample radial and axial support, but the failure of the ISB allows a clearance to exist in the mainshaft, effectively slamming the mainshaft into the rear bearing while decelerating in gear. (a load that no bearing can handle very well)
The clearance that exists in the mainshaft will also cause the countershaft to thrust in the opposite direction, because of the helix gear design. Now if you remember the only bearing on the countershaft that can effectively handle axial thrust is the snap ring bearing. This bearing is usually the next to fail in the transmission, and a good portion of the B-series transmissions I see have this failure.
Once this snap ring bearing begins to fail (sometimes the thrusting of the shaft itself can exert enough force on the gear selected to also cause this) the countershaft needle bearing begins to walk out of its hole in the D-series transmissions. In the B-series it is held in place by a locking tab. This bearing really has no effect on the shaft other than to keep it axially supported. But due to the helix design, it allows the countershaft to push on this bearing radially, and pull/push it axially because of the helical cut and clearance that exists in the mainshaft. This is what causes that bearing to walk out of its hole.

The differential bearings can also take quite a beating, but they are very strong and large compared to the others. They can use two types, the tapered roller and ball bearing type. The tapered roller is the strongest because it rotates the rollers at an angle to fight both axial and radial movement. The downside is a more complicated setup, and most differentials that use this design require a torque-to-turn setting, in which a torque wrench is used to determine the amount of effort need to turn it, in order to properly setup the preload. Ball bearing units are preferred by most because of the ease of setup, and no need to use a torque wrench to maintain the clearance, simply put a feeler gauge in there, and get the right thrust shim.
Defective bearings can also cause problems too, and not necessarily in sequence with what I have just spoke, which would be from the source to the output. Bearings can also fail for other reasons, such as lack of oil, improper installation, and so forth.
Many issues can arise of the problems/clearances mentioned, unable to maintain gear position and rapid wear of the slider and gear dogs are the primary victims of axial thrust. Shift forks can also be bent/broken by this axial and radial force. In severe cases teeth could sheer off the gears.
Second gear falling out tends to be the most common, so I will explain that. When a mainshaft clearance exists (Failed ISB, worn thrust washers/shims) Grabbing second gear can be a challenge. The force exerted into the countershaft for second gear is pushing up on it due to the gears design, and pulling down on the mainshaft towards the ISB. This makes travel to 2nd gear longer due to the countershaft pulling up because it is driven by the mainshaft, which is pushing in the opposite direction. This causes second to grind and occaisionally catch depending on the clearance that exists. On deceleration it pops out because the torque locks on the slider are not fully engaged (also worn out due to grinding) to the gear because the countershaft is thrusting, and the shift detent ball will also have pressure on it, mostly because the driver doesn't want to lose the gear. This tension combined with a slider not completely engaged allows second to pop out on its own.
Edited for grammatical errors.
Modified by slowcivic2k at 8:35 PM 7/25/2007
WTB: P28 Manual ECU, PM me if you have one!"They (Islamic extremists) don't attack us because we are rich, or we're free. They attack us because we are over there. We've been bombing Iraq for 10 years..." - Ron Paul