1) I leave mine on tow/haul for all driving since it makes the shift points a little higher and crisper, not so much wear on the transmission
2) I still don't tow in overdrive, but only because the transmission wants to be in 5th or 6th and engine speed is too low. The transmission starts to get really hot when attempting to pull up hill in 5th or 6th. I use 3rd or 4th for towing and keep my 5.3 gasser up around 4000 RPM. If you can handle the noise of the engine, you soon realize that fuel consumption gets much better, transmission temperature decreases, and engine temperature decreases (higher speed but lower load)