I'm having the same problem, except mine only seems to manifest itself on the highway above 75mph. No one's been able to pinpoint the problem, but here are some possible diagnoses:
Improperly spaced plugs
Bad fuel pump
Overheating tranny
Vacuum leak
Secondaries/intake gunked up
Cats/Pre-cats plugged or bad
Do you get a sulfur smell at WOT? Someone mentioned to me that is an indication that raw fuel is making it to the cats, which may be caused from improperly spaced plugs.
For the fuel pump, people have mentioned that the problem gets worse/better depending on how full the tank is. You may want to pay attention to see if the hesitation fluctuates.
For the tranny, I checked the fluid, and it seemed a little funky. If yours smells burned, get it changed right away.
A vacuum leak is the hardest to diagnose/fix. My car whistles after running for 15 minutes or so. The mechanic at my local Ford dealer said he could completely disassemble the engine and rebuild it and still not find the leak. Best thing to do is check the intake and related hoses for dryness/cracking.
You mentioned that it seems to happen right after the secondaries open up. Could be that the secondaries need to be cleaned, or maybe the MAF. Many people have reported that a good cleaning of the intake can make a big difference in performance.
Lastly (finally!) you mention you get a 420 code. I did a quick search, and came up with "Bank one Catalyst below threshold" which means something may be wrong with your cats. You might want to read more
here.