I accidentally get a similar effect when I try to drive a patch of road with the car in neutral. It's a very non-intuitive experience: from the engine sound I'd think I'm slowing down considerably, but from looking at the numbers I stay at pretty much the same speed for a looong time.
When I do this before stoplights I sometimes catch a green light with road to spare, and I'm able to avoid stopping at all. This helps me somewhat, but as a side effect it helps the traffic behind me a lot more.
I'll try to do this more often. Keeping in neutral is easier then trying to compute an optimum speed, and it'll help a lot with the consumption too.
IANAM (I am not a mechanic) but I've heard that it's bad for an automatic transmission to coast in neutral. Apparently the transmission isn't being lubricated in neutral, there's a risk of overheating, and it can be damaging to shift back into drive at high speeds.
In any case, you're not really saving any gas over coasting in drive or, alternately, setting the cruise control.
I don't know about automatic transmission. As for the fuel economy, I find it's easier to slow this way without really trying. Just put in in neutral when you see a red light. Of course it's only for before intersections/blockages, not on the highway.
When I do this before stoplights I sometimes catch a green light with road to spare, and I'm able to avoid stopping at all. This helps me somewhat, but as a side effect it helps the traffic behind me a lot more.
I'll try to do this more often. Keeping in neutral is easier then trying to compute an optimum speed, and it'll help a lot with the consumption too.