99% of the time a backfire means you are really rich. While it will not do immediate damage to your motor (although it could hurt your muffler), it will eventually wash out your rings if you run it like that a lot. You will be better in the long run if you correct your A/F ratio.
Those tail pipe flame things were really popular on hot rods in the late 50s and 60s. Its funny to see ricers doing it now. They used to put a spark plug in the tail pipe, run the car rich and have a switch to fire the plug when they wanted flame.