Add-on wood furnace in a small house?
I have a similar setup in my house, wood furnace add-on to existing oil-fired hot air furnace. I like it, but my furnace is quite old and needs replacement. That being said. This is one of the best set-ups to utilize the heat from a wood stove:
-Heated plenum for distribution through the ducts (usually, you have a separate t-stat that will control a combustion air fan, and a draft fan.
-Radiant heat from the stove, to heat your basement. (do you have uninsulated floors?).
Regarding a free-standing stove on the 1st floor, for a chimney, you would only see the black metal (or other color) stove pipe in the room. The Stainless tripple wall, or similar will starte at the ceiling and run through the attic and outside. You do not see this in the room. I have installed a few of these and they are not difficult to do, but yes they are pricey. If I had the space and money, I would go with a free-standing soap-stone stove (Hearthstone most likely), right in the corner of the living room. But if you do not want to have the wood mess up there, then go for the basement add-on.
Lastly, You do not have to do an add-on in the basement. If you basement is all open, and the floor uninsulated, you could just get a good sized box-type stove and use that heat the basement, and subsequently, the floors above. I did it this way for a few years in an older house.
Anyway, regarding your initial question about safety. I felt that the add-on stove is quite safe. And the newer the model the better. Better controls, better operation etc....