Depends on the kind of traffic. If the transmission is constantly hunting between 3rd and 4th gear when you're in traffic I'd leave it in D. I'd think though that in heavy stop-and-go traffic you'd never get going fast enough to reach top gear though of course that depends on the transmission and gearing setup of the vehicle.

On my car, with light throttle the 4-speed automatic upshifts to 4th at 40 mph and back down to 3rd at 35 mph. So if I'm in traffic constantly going between those speeds (a pretty common occurrence) I leave the transmission in 3rd to lock out 4th gear. (If in really heavy traffic such as in the big city going from stoplight to stoplight with speed never reaching 40 mph it's not an issue.)

Posted by: @toyotafantoo

Should I drive in D or 4?

In an automatic, you should drive in 'D'. (per your owner's manual)

Posted by: @toyotafantoo

Some claim driving in 4 under 45 MPH =

selecting '4' forces your transmission to only use speeds 1, 2, 3 & 4. No overdrive (5th).

If you don't go fast enough, then the transmission doesn't use 5th anyways. If you do go fast enough, and you prevent it from upshifting, then you'll get worse economy. Just let the auto do it's thing. You don't need to be a control freak except in pretty rare circumstances (you'll know).

Thanks everyone.