Can I tow with a tow bar in neutral with out hurting anything?

You'll probably get different responses here. Many will tell you to drop the drive shaft.
It WILL depend on what you have. I tow my Samurai, which is a 5 speed with the transmission in second gear and the transfer case in neutral as the RVers do behind their motor homes. I did this with my first Samurai without problems and now my second.
With an automatic, I'd drop the shaft or haul or dolly it with the drive axle off the ground. JMO
David

A buddy did the same as Oldsam without issues.  Ack's Faq has information from a manual on flat towing:

http://www.acksfaq.com/flattow.htm

Thanks, For the link.I am only towing locally.

I flat-towed my tin top from the Outer Banks of NC to Astoria OR, transfer case in neutral-tranny in 2nd. No issues whatsoever. I seem to remember seeing in the owner's manual for the sammy that they say it's ok to do, so long as you have it configured as aforementioned.

The reason for the transmission in 2nd is to make sure it stays oiled. I started towing just with trans on neutral before I read the "correct" way. I probably have conservatively 60.000 miles towng behind my RV with no problem this way. I do start the engine every couple hundred miles or so(usually when I get gas) and run the transmission in 2nd with the T-case in neutral. There are some horror storys about vehicles just jumping into gear by themselves but I think most are just accidentally left in gear. You can try to shift into 1st gear while traveling at almost any speed without a clutch. Anyway, when I hookup, I ALWAYS do it with the engine running so I KNOW it is in neutral. After I hookup, I just turn the key back ONE position so the steering wheel stays UNLOCKED.

I have done it both ways,
The T-Case in  N and the Tranny in 2nd on the way out to Elko, NV (1698 miles)
                                       AND
Dropped the rear shaft on the way back; Reasoning that 1st, I had an extra 1700 miles on the odometer that didn't need to be there, Also I was Flat Towing back in Snow Season Thru the Rocky Mountains, which is way HARRIER than pulling a trailer as flat towing has a DEFINNITE PUSH  that will "Fold You Up" in down hill braking, and wants to push you to the "Outside" of a turn (You Have NO TOWED VEHICLE Braking),
                                       AND
Without the T-Case turning, its Free Wheeling, Less Drag (Part of the above)
                                       AND
It's only 8 bolts which are so easily accessible ....So Why Not?

CAPT