I have been driving my "rig" around town to get used to driving with a trailer, and parking it. My 1.6 liter Nissan Versa does a fine job in town and on country roads. We don't have a lot of hills here so I can't say this rig will work in mountains. But taking it easy, driving the speed limit and driving relaxed works fine. I live in a small town so other drivers are not too hectic and they are patient. When the weather warms up a lot of Chicagioso will arrive and drive like idiots, that will be a good test.
I am getting about 25 mpg. I'm not sure the good gas mileage is worth the lack of power. I would rather have more power for acceleration, highway driving and getting up hills.
It is very difficult to back up. I need to learn how to do this. I can't hardly back into my driveway without hitting the other car.
The front wheels will spin pretty easily on gravel over asphalt. It still works on gravel roads but I could see problems in rainy muddy weather. FWD is not ideal for pulling a trailer. I drove through a local state campground with two track roads and the car pulled us right through no problem. So it works but you need to know your limits.
I like the Versa because it is kind of simple, tractor technology, but I am looking at the new Jeep Renegade 4x4, it looks pretty cool. It is narrow enough to get through the two tracks in the forest trails around here. It has a 2.5 liter motor, which should be better on the highway and in mountains.
The trailer seems to work better when loaded. It bounces and jumps around a lot when it is empty, jerking the car every time. With weight in it, it is more stable and doesn't jerk the car around as much. The additional weight doesn't seem to affect driving too much. I don't have it fully loaded yet though, just the basic camping gear.
The car works on interstate highways but it slows down a lot on any slope. You need to be ready to downshift on long hills.
So after about 100 miles of driving around town, I can say that a small car pulling a light cargo trailer or teardrop will work fine, if you stay out of mountains and avoid the interstate.