when you say "small", how small is it? under 2000 lbs, you should be ok. if over 2k, i would drive in 3rd gear, with or without lock up. and the reason is because the constant unlocking, locking of the torque converter and the down shifting and upshifting will wear the trans out over time.
never drive in od with out lock up. i say that because if your using stock gearing, the torque converter builds up to much heat and combined with the slow eng speed, there is not enough flow through the trans cooler to properly cool the fluid. now its ok to operate in od without lockup if say, you are climbing a slight incline and the trans unlocks for a brief time, this is normal.
when it comes to towing, you are best off with an automatic, you can't lug an automatic trans. it will down shift if properly set up. and please get an auxiliary trans cooler.
all the above info is based on a stock car with stock equipment. if not stock, we will need to know eng size and power, rear axle gear ratio, and weight of boat and trailer.