I just got this '06 XL883L and it's my first Harley. I'm wanting to change the oil in the engine and primary. From what I've been able to find, the engine oil feeds the transmission too, so when you change the engine oil you also change the transmission oil. I've decided on Mobil 1 V Twin 20w-50.
Concerning the Primary—that's the clutch and primary chain I'm told—someone suggested ATF, someone suggested gear oil and others said just use the same oil in 'em all. I picked up a quart of Redline Shockproof synthetic for the Primary. But I'm finding that more are suggesting ATF because it doesn't foam up whereas the oils do. And apparently, foaming is not a good thing in the primary.
I know I'll get a lot of differing opinions on this but I'd like to see what the majority thinks before I make my decision.

Here's a video of someone who seems to know what he's talking about saying, definitely, ATF

 

the old ironheads shared lubrication, not the evo engines.
there is a drain on the primary side and you fill through the chain inspection cover. the engine drain is low down by the rear swing arm.
on the old ironheads, there was a transfer valve that joined the flywheel comp to primary, that was done away with.
the primary oil from hd was sportgear oil. i use mobil 1 syn gear oil. there are two weights and i find the heavier one shifts better. personally i would not use atf, but hey, your machine. atf is more along the lines of hyd oil and the gearing in an automatic is a diff animal with diff clearances and gear sets (sungear). your machine has spur gears with diff running spec's as well, they say, this type of gearing chews up the oil over time so the need for a hp type additive. but if you change regularly, probably no issues.

 

The engine oil lubricates just the engine in the EVO Sportsters.
The primary and transmission share the same lubrication cavity.

Red line recommends the 75w-90 diff lube for the Evo Sportster primary/transmission.
Harley reccomends Formaula+ for the Sportster Primary/transmission.
It is a gear oil. (It says on the bottle "not for use in the engine")

Here is what you will find if you run the "shockproof" in a Sportster primary/transmission:
http://xlforum.net/forums/showthread.php?t=1998141

 

You can download your owner's manual, parts list and wiring diagram from Harley Davidson:

The owner's manual has the engine oil and primary/transmission oil change procedures and capacities.
The updated by HD engine oil capacity is 2.8 quarts. The owners manual lists 3.6 quarts.
2006 SPORTSTER OWNER'S MANUAL

2006 SPORTSTER MODELS PARTS CATALOG

2006 WIRING DIAGRAMS

 

Use Harley's Formula+. Nothing any better and cheap for the amount needed. It is a straight weight non detergent gear oil. No EP. Non detergent is best in a non filtered box.
Just quoting what the engineers say and not just Harley.