2offroad said:
The T/C is in neutral, so the tranny does not move. The pump for the T/C is on the rear output so it gets lubed, the only thing bad about flat towing is the tires get miles on them. I flat tow my '98 with Detroits in both ends, with a '99 1500 GMC with no problems.
This can be a bad idea if you don't have a true neutral in the t-case. I think I heard somewhere that at some year model the t-case changed to a true neutral, but I'm not positive about that, maybe someone can confirm. If you don't have true neutral in the t-case (most), then the t-case is in 4wd when in nuetral. So, the trans is disconnected, but the front and rear axles are connected. This depends on open diffs so it doesn't bind up. I have a friend who towed his YJ (locked front and rear) behind his motorhome succesfully for a couple of years, then one day the t-case exploded, one of the driveshafts twisted, and it broke the bellhousing.....nasty.
If you're going to flat tow, and you have lockers, make sure you have a later model with true neutral, or buy the Tera 2low kit that provides a true neutral.
Flat towing is fine, but trailering is better if you can. A class A motor home has plenty big enough brakes, but many class C's are marginal in GCVW capacity. The benefits to a trailer are the trailer brakes, you don't wear out your jeep tires, if you nearly cut a tire through on the trail it could blow out on the drive home (happened to me twice, but I was driving it) and you won't know it soon enough while flat towing behind a big rig, and if you break something critical you can nurse it back to a spot where you can load it on the trailer and fix it at home. If you can do it, trailering is MUCH superior to flat towing.
Oh, and I'd rather blow a tire on the trailer than on the Jeep. If you have a motorhome or truck and camper, you have a chance to see the trailer tires in the mirror, flat towing the Jeep there's no way. If you have a trailer, you shouldn't go cheap on the tires, use a good commercial tire with a heavy load range, and check the air pressure regularly. While on a trip, get in the habit of thumping the tires when you stop, just like a trucker does, to make sure one of them isn't going flat.