Automatic Transmission problems of the 2001 Toyota Prius

My wife's 2001 Toyota Prius with 108k miles stopped being able to be driven when she was driving it home. It stopped on a major highway and more warning lights than I'd ever seen came on. It would not drive more than a few mph and would shake and run roughly. It had to be towed approx 81 miles to a Toyota dealer near our home. They told us the transmission needs to be replaced for about $7000 including labor. After doing some research online, I found that this is a somewhat common problem with other owners (priuschat. Com). Also, that there were several references to Toyota covering part or most of the bill, even on vehicles not under warranty. If that's not admitting a defect, I don't know what is.