In Vim how can I search and replace every other match?

Here's a custom command that should do the trick. It uses a replace expression to count the replacements done, and uses a passed additional argument to decide whether a replacement should be done. (This allows more complex arrangements than every second one.) Your example would then be a simple:

:%SubstituteSelected/\<bar\>/&1/ yn

Here's the (unfortunately quite long) implementation:

":[range]SubstituteSelected/{pattern}/{string}/[flags] {answers}
"           Replace matches of {pattern} in the current line /
"           [range] with {string}, determining whether a particular
"           match should be replaced on the sequence of "y" or "n"
"           in {answers}. I.e. with "ynn", the first match is
"           replaced, the second and third are not, the fourth is
"           again replaced, ...
"           Handles & and \0, \1 .. \9 in {string}.
function! CountedReplace()
    let l:index = s:SubstituteSelected.count % len(s:SubstituteSelected.answers)
    let s:SubstituteSelected.count += 1

    if s:SubstituteSelected.answers[l:index] ==# 'y'
        if s:SubstituteSelected.replacement =~# '^\\='
            " Handle sub-replace-special.
            return eval(s:SubstituteSelected.replacement[2:])
        else
            " Handle & and \0, \1 .. \9 (but not \u, \U, \n, etc.)
            let l:replacement = s:SubstituteSelected.replacement
            for l:submatch in range(0, 9)
                let l:replacement = substitute(l:replacement,
                \   '\%(\%(^\|[^\\]\)\%(\\\\\)*\\\)\@<!' .
                \       (l:submatch == 0 ?
                \           '\%(&\|\\'.l:submatch.'\)' :
                \           '\\' . l:submatch
                \       ),
                \   submatch(l:submatch), 'g'
                \)
            endfor
            return l:replacement
        endif
    elseif s:SubstituteSelected.answers[l:index] ==# 'n'
        return submatch(0)
    else
        throw 'ASSERT: Invalid answer: ' . string(s:SubstituteSelected.answers[l:index])
    endif
endfunction
function! s:SubstituteSelected( range, arguments )
    let l:matches = matchlist(a:arguments, '^\(\i\@!\S\)\(.*\)\%(\%(^\|[^\\]\)\%(\\\\\)*\\\)\@<!\1\(.*\)\%(\%(^\|[^\\]\)\%(\\\\\)*\\\)\@<!\1\(\S*\)\s\+\([yn]\+\)$')
    if empty(l:matches)
        echoerr 'Invalid arguments'
        return
    endif
    let s:SubstituteSelected = {'count': 0}
    let [l:separator, l:pattern, s:SubstituteSelected.replacement, l:flags, s:SubstituteSelected.answers] = l:matches[1:5]

    execute printf('%ssubstitute %s%s%s\=CountedReplace()%s%s',
    \   a:range, l:separator, l:pattern, l:separator, l:separator, l:flags
    \)
endfunction
command! -bar -range -nargs=1 SubstituteSelected call <SID>SubstituteSelected('<line1>,<line2>', <q-args>)

Edit

I've now published this (together with related commands) as the PatternsOnText plugin.