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question about insulation
As the salesman said an acid salt is used to make the cellulose both flame resistant and vermine proof. While I suppose nearly anything can be harmful, the only health concerns I've heard of regarding cellulose insulation are during the installation of the product--and even then it's mainly because of the dust. Once installed, I believe it's considered quite benign. I've never heard of any off-gassing concerns as are common with other building materials like engineered wood products (from the formaldehyde-containing glue) and carpet.
Remember though that cellulose is literally used to make sponges--thus it can both trap and hold significant amounts of water. While I believe that virtually <I>every</I> home allows some liquid water to penetrate in some conditions, the tendency for such tends to increase with age. Before installing <I>any</I> insulation in the walls, make sure that eaves, flashings, gutters, siding, caulking, etc. are in <B>very good</B> condition! (On the subject of caulking--do NOT caulk below window sills--this is an intentional drainage route for liquid water that penetrates. Caulk below the sills and this water will become trapped rotting the sills and framing.)
I've been enough old gutted homes during rainstorms to know that even "decent looking" shells leak some water and "typical" shells can leak quite a lot. As long as the walls remain uninsulated and somewhat drafty (also common), the water will evaporate and there won't be any permanent damage unless the leaks are severe. Add insulation (especially cellulose or fiberglass) and water that was insufficient to cause a problem before can easily become trapped and build to the point that it causes severe and costly damage.
As Brad White mentioned, the cavities in the corners of balloon-framed homes are virtually inaccessible and frequently quite drafty. The only practical way to insulate them is with expanding foam.