I think this is a problem with all oils. When something burns, it produces smoke. Smoke is generally indicative of something that isn't particularly good for us if inhaled. Same holds for oils. It seems that all oils will begin to produce toxins once they hit their smoke point. However, before that, they are completely fine. So pick an oil that will handle the temperature you're using by checking the smoke point.
There's also a difference between producing toxins and toxic. Does burning oil produce toxins? Yes. Will that actually make you sick? I don't know. But my inclination is that it's unlikely to cause you harm under "normal" usage or else we'd be hearing about people actually getting sick from burning their oil rather than just getting scare stories on the news about free radicals.
And to get very sciency (stop reading immediately if your eyes glaze over, I think that's a sign of toxicity), from biology online:
Researchers investigated processes of
oxidative degradation - notably that
caused at 70°C with ventilation - of a
broad group of oils with very
wide-ranging compositions. Another
degradation process studied was that
which is caused by microwave action
that does not heat greater than a
temperature of 190°C.
In both processes deterioration of the
oils takes place. In the first type of
process (70°C with ventilation)
hydroperoxides are first produced and
subsequently aldehydes. In the second
kind of process (microwave) it is
basically aldehydes produced. It has
to be pointed out that both the
oxidative conditions and the
composition of the oil determined the
velocity of the degradation and both
the nature and concentration of the
compounds produced.
These studies have shown, for the
first time, that degradation of lipids
in foods can produce toxic oxygenated
aldehydes. These compounds, well-known
in medical studies for their geno- and
cytotoxic activity, considered as
markers of oxidative stress in cells
as well as being causal agents of
degenerative illnesses, had not
previously been detected in
foodstuffs.
Researchers have shown that some oils
produce these toxic substances in
greater quantities and at a greater
rate. Virgin olive oil was, amongst
all the oils studied, that which took
longer to produce this type of
compounds and produced a lower
concentration of them.
According to Harold McGee, using olive oil to fry is basically a waste of money. "After I’d heated them, none of the olive oils had much olive flavor left. In fact, they didn’t taste much different from the seed oils."
According to a Spanish study I have access to, you could use high oleic sunflower oil for frying as it degrades better.
Best Answer
See this article from Colorado University Safe Food. The goal is to prevent growth of the botulism pathogen. Here are their key points:
Sorry the source article is not formatted prettily, but I was looking for something more authoritative than
about.com
orehow.com
.