I have a book called Logo, Font and Lettering Bible and the techniques that are discussed in it concern using Illustrator to create fonts. One of the things mentioned in the book is illustrators free transform tool, I was wondering what would be the equivalent in Inkscape?

I guess in Inkscape it is simply the (not so "free") "select and transform objects" arrow. The problem is that the "distortion" capability seems to be missing?

I think the Free Transfer tool can only resize an object and rotate it. In which case the Select tool in Inkscape does both these functions. When you click an object you toggle between handles for scaling the object and handles for rotating the object. Not quite as accessible but still very functional.

Additionaly the Ínkscape select tool can also "skew".
Illus tool can distort with some keyboard shortcuts somewhat similar to dealing with envelopes.