07 PreRunner Questions

Newbie here just bought a used 07 PreRunner TRD OffRoad SR5 Quad cab.
I have a couple questions about possible brake noise and AT shifting.
When I apply brakes with the windows up I hear a noise that sounds like the brakes are grinding and need replacing. When I roll down the window I don't hear the noise. I have looked the best I can at the front disc pads and they appear to have about 1/4" or so of pad left. Is this noise from the brakes or maybe the drive train?
Second ?. When I am drive in town and keep the speed around 40mph and foot on pedal the at is smooth, same on highway at 65-70 mph. But if I let off the gas to slow down, no brake the truck feels like it is shifting to a lower gear or running out of gas. My guess is downshifting. I am not used to a 5 speed auto. My older 98 PreRunner is only a 4 speed and doesn't do this.
If anyone has any experience with these 2 items I would appreciate the input.
Thanks.

 

I'm not familiar with your first problem with the brakes, but the second issue you have is perfectly normal. My truck does the same thing. And its been doing it since I drove it off the lot in 07.

 

Thanks for the reply.

 

I think it's just engine braking. My truck does that and it's new. It felt different to me, since I had been driving an I-6 4spd for 5 years or so.