Originally Posted by BlueXJ

Basically if you are towing a car with an automatic transmission if you remove the driveshaft so that the rearend (rear differential) can not turn it while the vehicle is moving then you can now safely tow that vehicle.

On a manual vehicle that is being towed that is not required. You need only place the transmission into neutral.

The reason that the automatic vehicle needs the driveshaft to be removed is that the rear pump in the transmission is made to pump fluid that is not there when the transmission is not being moved internally by the engine running. This lack of fluid will eventually (very short time) burn up the impeller parts of the pump.

Hope that summary is an explanation that is understandable.