A few questions: is your truck really set to to tow? Is it a single pole, single throw switch, or a double pole, double throw switch. A double pole, double throw switch, has three positions; top, middle, and bottom. If you turn the switch to on, and you are driving, when you come up to a stop light, sign, whatever, does it buck and jump and try to die?
If its any of the last two items, its a torque converter lockup switch. It keeps the torque converter in the tranny locked longer than the PCM normally does. This is a good thing, unless you are down to about 15 mph, or lower. Then, you need to unlock it, so you can stop and go normally.
Considering its right there on the lower dash, kinda makes me believe this may be the case. Easy to get to, easy to control. When the light is on, converter is locked.