I also haven't heard or read anything about it being harmful if inhaled. At leasts not the food grade. My son has severe asthma and also has no problems with it inside the house.
DE is very safe for animals. I put it in my dogs food to keep flea's,flies and ticks away/off of them. I also use it in my house along windows and doors to keep ants out. It will keep mites, fleas and ticks off of chickens if they dust bath in it.