Formalde-hiding in Our Clothes?

So it turns out formaldehyde is in a lot of stuff. A little creepy, that.  But this Times piece rather seems to be going out of its way to turn this into the Poison Scare Du Jour--eek!  Embalming fluid! Seeping out of your clothes!  It's a little thin on what harm this might actually do:

Though it is not obvious from the label, the antiwrinkle finish comes from a resin that releases formaldehyde, the chemical that is usually associated with embalming fluids or dissected frogs in biology class.

And clothing is not the only thing treated with the chemical. Formaldehyde is commonly found in a broad range of consumer products and can show up in practically every room of the house. The sheets and pillow cases on the bed. The drapes hanging in the living room. The upholstery on the couch. In the bathroom, it can be found in personal care products like shampoos, lotions and eye shadow. It may even be in the baseball cap hanging by the back door.

Most consumers will probably never have a problem with exposure to formaldehyde, though it can have serious health implications for people who work with the chemical in factories. The biggest potential issue for those wearing wrinkle-resistant clothing can be a skin condition called contact dermatitis. It affects a small group of people and can cause itchy skin, rashes and blisters, according to a recent government study on formaldehyde in textiles. Still, some critics said more studies on a wider array of textiles and clothing chemicals were needed, including a closer look at the effects of cumulative exposure. At the very least, they said, better labeling would help.

"A condition called contact dermatitis" sounds way scarier--maybe even fatal--than "a rash", which is what I believe laymen call it.  Yes, some people can get rashes from random things.  I'm sure formaldehyde is among them.  But I'm not quite ready to start ironing my sheets again (sorry Mom).

But . . . ew, formaldehyde.  It's a chemical!  Indeed it is.  You're surrounded by chemicals.  Your couch is made of chemicals.  So is the table.  So is the hand-carded wool sweater you bought from the woman who raises her own sheep on organic feed.  Distilled water is a chemical.  Fine wine is full of them.

What I want to know is whether the chemical is dangerous, and the relative naturalness/unnaturalness isn't all that good a guid--plants and animals have been churning out deadly poisons for millions of years, to keep from being eaten.  The New York Times article offers little reason why I should care that there is formaldehyde in my stuff, unless I am in the very small group of people who are allergic to it, or who work in factories where the stuff is applied.