Most of the paranoia over the use of urethane resin was actually accurate about 15 years ago. But, the stuff used today has a very low level of toxicity. I've been making stuff in resin for about 20 years and have talked at length about this with various resin experts. The simple way to think of this is to realize that those who make urethane resin have a really good reason to make the stuff as non-toxic as possible-- they work with it every day. I'm not saying the stuff isn't toxic, I'm just saying that as a hobbiest working with a resin kit, the exposure level is incredibly low compared to those of us who make the kits. In other words, its not worth worrying about.
As far as sanding dust is concerned, whether its from resin or wood, a mask is always a good idea. Resin dust is just as inert as wood dust, so there is no additional risk. Resin dust particles are larger than wood particles because it is a softer material, and the natural filtration accorded by your nose should do the trick, but it certainly can't hurt to wear a mask. For the record, I don't use a mask unless I'm going to be in a cloud of resin dust. A trick I do use when I'm going to do a BIG sanding job is to do my dremeling very close to the end of a vacuum cleaner hose. No dust in the air at all!
One thing to note is that the odor of resin definitely varies by manufacturer. The really cheap resin will have a bit of diesel oil mixed in. When the containers are left to sit, the oil separates out and rises to the top. This is added as a moisture barrier. Resin can suck the moisture right out of the air in the container. This is why some people find that their resin starts to swell up a bit. Moisture causes a foaming action in the chemistry. Those in humid locations know what I'm talking about. The higher quality resins do not add a barrier and its up to the user to use a nitrogen blanket or to just use it before it gets contaminated.
Another thing to note is resin should be measured by volume, not weight. It is possible to get the mix so far off by measuring by weight that the part will leach at some point. In the resin I use (Vagabond, sorry Will...) Part A is 10% heavier than Part B. Since the resin is supposed to be measured by volume, being off by 10% can be significant. This is particularly true of the chemistry of white resin. That stuff is really sensitive to what happens if the mixing ratio is off.
As long as I've used urethane resin, I have never encountered any health problems. I don't know of anyone who did, either. And I know a LOT of people who use urethane resin! So, I guess my point is that while toxicity is not really an issue with today's formulations-- for the casual user --being cautious is really more a matter of what makes you comfortable. And since I'm not exactly a stumbling corpse, those of us who use urethane professionally can be pretty sure the stuff is safer today than it used to be when it was definitely advisable to use protection.
Scott