my 95 legacy the power locks worked by pushing the lock on the door or by using the key in the drivers door would work all the locks as well. the 1998 outback i just got has a button for power locks witch works but the key in door only unlocks/locks the one door and does not power lock/unlock all the other doors like the old car did. did the 98 outback have this feature? if so how can i test it?

As far as I know they did away with that feature after 96. Many vehicles had some similar feature where unlocking one door would unlock all of them, but it was done away with over security concerns.

First click unlocks driver's door?

Second click unlocks all other doors?

how hard would it be to say add this function in if i were to get the switch from a 95 for the door lock?

A relay and the key cylinder switch. Compare the wire diagrams of the two years and it shouldn't be that hard to get it working.