Heck, we ran a 1" belt on a 1-1/2" pulley for over 2 years on my wife's Softail before we redid her wheels, pulley and rotors. As long as the belt is tensioned properly and the wheel is straight, you won't have a problem.

Now, if you're doing this to put on a wider tire, make sure the belt isn't being pushed up against the outside edge of the tranny pulley in order to give you tire clearance and that you're not purposely misaligning the rear wheel to keep the belt from creeping toward the tire on the pulley.

 

I can't imagine it would be a problem. I adjust the alignment on my Softail Custom by rotating the wheel and getting the belt in the center of the pulley rather than measuring the swing arm to axle. It has always worked for me and the belt is always in the center of the pulley unless I back up, and then it will move to one side until I go forward again. I would just adjust it till it is running in the center and all should be good. Just my 2 cents.

 

There are two guys on here I would listen to and they are the ones with real world experience. Wheel alignment is pretty much fixed on your bike so there isn't much other than tension that you can control. I really don't see it being an issue and I even thought about doing the same thing but I went with a 70 tooth and had to swap the belt anyway.

 

Need to think about that one. I do the same thing as you, have just learned on my bike the .008 offset that does that for me. However remember our Softail has a fixed engine in the frame and therefor you must align the rear pulley to the sprocket and rely on Harley having the frame good enough to hold the +/-1/32 misalignment of the axle being parallel with the swing arm. Probably more for visual appearance since the handle bars actual align the bike.
Now the Dynas and Crusers engines are soft mounted and the swing arm comes off the back of the transmission. However when you put a 1 1/8 wide rear pulley on are the centers of it and the 1" wide one the same? I had assumed it was the outboard flange was on the same center line since the narrow belt was for a wider tire. Adjusting to center here could throw the rear tire way out of the parallel tolerance to the swing arm.

 

I won't tell you it's ok but from my experience but it won't hurt the belt if it's smaller. On softs the pulley is slightly larger than the belt anyway.If you can get the belt to 1/32 straight from center your doing something. If it's aligned straight you can spin the wheel forward and you will only hear the belt.If wheel is cocked to the left or right from center you will hear and feel each tooth on the belt leaving the pulley. J Kraft is right about the belt being in the same place while moving forward weather it's adjusted right or not. They move to the hub rolling backwards, thus the need for the lips on the pulley. Also different brand belts of the same advertised width vary.