With proper venting, indoor wood furnaces are generally safe. Most indoor wood furnaces use wood gasification, which converts far more of the energy stored in wood into heat. As a result, they produce less smoke and, ideally, less carbon monoxide.
Wood-burning furnaces and boilers intended for outdoor use produce a significant amount of smoke and potentially dangerous chemicals. Therefore, venting systems need to be robust to provide sufficient safety. Newer boilers and furnaces use gasification technology, which requires similar venting to other indoor furnaces and boiler systems. As long as the system is able to vent properly, it poses no more risk than other central heating systems, and carbon monoxide detectors can detect unsafe operation.