3.42 was for the Tahoe.
Went through the Suburban decision process awhile back when I picked one up. A few thoughts off the top of my head...
-Suitability for towing really just depends on what you find acceptable; some guys are cool pulling cars with four-banger S-10's, while others need a modified turbo diesel.
-OEM gearing is pretty poor for heavier towing. With Z71 tire size, and the 4L60/10-bolt combo, you'll be lugging the thing down the road in OD, which is absolutely brutal on that transmission architecture. With only four (widely spaced) gears to play with, you'll have a big jump down the third/direct.
-The 4L60 is fine for light usage, in lighter trucks. Put it behind the 5.3L, in the largest vehicle, and start pulling...they don't last a long time. Good thing is though that they're available everywhere in junkyards, and/or there are several different outfits that specialize in rebuilding them to a better spec.
-Suspension (coil-spring rear, light spring rates, p-metric tires, etc.) is set up for ride comfort. This is great for riding around empty, though.
-2004 was the first year for hydroboost brakes on the half-tons. This is a great feature!
-G80 rear locker is really helpful for off-roading/snow/etc.
Other issues are common to the GMT-800 platform (like the knock sensors), and well understood.