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.
In any case, you're not really saving any gas over coasting in drive or, alternately, setting the cruise control.