Last first, it probably won't hurt the engine, but it could further damage the transmission to continue to drive this crippled car. It's possible that the TCU is the only problem but I know there could be internal problems in the transmission. Who diagnosed the car, the owner? How long has he been driving it this way? The 'limp in' default mode is for getting you home or to a shop ASAP, not to allow you to drive it as if nothing were wrong at all. Check the trans fluid, if it's black or burned smelling, the transmission has overheated at the very least and is probably damaged.
If you really want to buy this questionable car, get a guaranteed estimate on repairs from a reputable shop, which pay for. Then buy the car real cheap because these cars are not easy or cheap to repair. There is no way for me to tell you what's wrong or how much is it will cost to repair it without diagnosing it myself.
here's a directory link for you:
http://repairpal.com/directory?address=59405&car_bran...