performance down sides to rear sway bar?

i was wondering if there are any types of driving where no rear sway bar is better? i have also been hearing from lots of people that a rear sway bar would cause too much stiffness in my 66 fastback.

btw, i already upgraded the front to 1" with mydolene bushings and WOW what a difference
 
Unfortunately I am odds with Historic on this one, for exactly the same reason he is infavor of no sway bar.

On the street you can only benefit from the rear bar. The car will be less prone to get 'loose' when taking those freeway ramps at speed and offers better predictability. It will also help you if you run tires right at the limit of fit and decrease the times they scrub on the inside of the fenders on you.

I find that I prefer the stiffer, more predictable response from my car with the bar installed, without it taking some aggressive turns on the street often left me feeling 'uneasy' with feedback the car was giving, with it in, I can take the same corners faster without that bad feeling. However on the track with its well manicured pavement, usually obstacle free running, and supposidely car juice (oil, anti-freeze/gas) free environment, if you are an experienced driver you might find that you prefer the looser feel of the car....I have not yet come to a point where I can say I do ;)
 
Both of the above suggestions may be correct depending on what you want to do with the car (drag, street, road race, or a combination), what other performance parts are on the car (tires, front suspension, the type of springs & shocks [or coilovers], panhard bar, 3-link rear set-up, altered camber settings, etc.), and budget.

Sway bars are not expensive. Install one and see how you like it.
 
I put one on my '68 a couple months after buying it, and I can assure you there are no downsides to installing one. If you don't believe me, here's more evidence, pretty much every car we own has one from the factory. That includes our Suburban, '88 Mustang GT, and my wife's '69 Corvette. Every race car you can think of has one, from rally cars, to TransAm cars to Nextel Cup Nascar racers to NHRA Pro Stocks. I know some people think they are the cause of a loose condition, but I've driven our '88 GT too hard with too much throttle input, too often to believe such hogwash. 1995cobraR said it best, buy it and try it and you too will like it.
 
Your car's current setup will dictate if a rear sway bar is needed or will add any impvoement to your ride. For maximum performance, comfort or a compromise between the two, you have to tune the suspension. Understanding the concept of roll stiffness as well as roll force distribution will help you achieve your goals.

From a performance standpoint, a "neutral" handling car is usually the better performing car. This is achieved by using different springs and sway bars.

Example:

If your car currently understeers, a rear sway bar can help you achieve a more neutral balance. However, if your car has a tendency to oversteer, and you do not have a rear sway bar, adding one will not help the situation. In fact, it will probably make it worse.

Most of the time, our cars tend to understeer as people will add stiffer coil springs and leave the stock rear leaf springs. A rear sway bar would be a good way to even things out.

If this is the case with your car, then installing a rear sway bar should show an improvement. As far as what kind of rear bar to purchase, whatever you do, get an adjustable rear bar. This will allow you to tune the rear to get the feel just right for your personal tastes.
 
it will depend on your settup as to whether or not you should use a bar, and what size you should use. if you are going racing, and are using a detroit locker or similar rear, you dont want to use a rear bar, or use a small one, as the rear of the car tends to want to come around when you get on the throttle coming out of a corner. on the street you can use a larger bar as most of the time you wont get into a situation where the car being loose will be a problem. as you stiffen up the rear suspension, you have to be carefull, unless you alsostiffen up the front, so as not to make the car unstable.
 
Red Barchetta seems to have said it the best.

My setup is along those lines, 620 springs, slightly stiffer rear 4 leafs, 1" front bar and 3/4" rear bar. It seems to be pretty neutral to me, and doesn't have too many bad manners.

I do have to add, the shelby drop seems to help tremendously..and might make a difference as to the necessity of a rear bar. My 65 seemed too "wiggly" in the rear for my tastes before I installed the rear sway.