Quote from morpha :

Think of the car as sitting there in either Park or Neutral on an actual automatic transmission. To get the car moving, you have to put it into Drive first, which is done by putting it in first gear. Further shifting will then happen automatically through the forward speeds, but it won't put itself into N/P and the brakes will not put it into reverse, as they do on many arcade games.

To clarify, LFS does not actually simulate an automatic transmission, it merely allows you to have it shift the manual gearbox for you.

Thanks for the information - I had no idea what I was doing wrong at first. I should probably read through the manual afterwards as well.