On my first VX, I installed Tone's hitch as per the direction, and didn't have any trouble at all. As far as what you can tow... anything withing the limits of the hitch, which is Class 3. People have towed cars, trailers, jet skis.... again... within the limits of it's class. The loops on the side are made for the safety chains attached to whatever trailer you may be towing, in case of emergency.

You say you were using the tow hitch and then the loops broke. Were you pulling the steak from the loops, or the hitch...or what? If you were using the loops, well.....it sucks, but the loops weren't meant for that.