This is a good question, and one that definitely deserves paying attention to. Using the wrong products on wood studs inside of walls can cause major health problems and in the worst case even death. I know that sounds extreme but I have personally had experience with a home that was built by a do-it-yourselfer who thought if he used all pressure treated lumber in the walls that his house would never rot. Well, the house didn’t rot, but it did stink like poison, and the owner/builder eventually died of brain tumors related to over exposure of the toxic chemicals.
What he failed to realize is that all of the protective layers that are put on the outside of a home to prevent rain and bugs forms a sort of jacket around the home. And while keeping the elements out, it is keeping the living space or ‘conditioned air space’ in. So it is important to keep the conditioned air space free from toxins. There are building wrap products to help the home breath better but this wont stop the smells of poison in the wall because the 1/2? sheetrock on the inside of the wall is much thinner and much more porous than the 1/2? plywood on the other side of the wall. Plus on top of the plywood you have either building paper or house wrap then siding and paint. So its much easier for the smells to travel in the home rather than out.
Treated wood is primarily used for ground contact or direct contact to concrete. While treated wood is about half the price of the alternative rot resistant wood (redwood), it is about 2-3 times the amount of un-treated doug fur which is the material of choice for most builders. Most treated wood is actually doug fur that gets injected with many different poisons (that’s why you see all the little dash marks on treated wood, its from the injection process). Since they are taking the same doug fur lumber to inject as they a they will typically use the number 2 boards or lower end.
Between you, me, and the rest of the world that reads this, Treated wood is not a safe alternative to naturally rot and pest resistant woods like redwood. States like California have recently banned treated wood from all landfills and dump sites due to ground water contamination. The recent standard change has also reduced the amount of toxin levels by approx. 50%. While these efforts are a step in the right direction it is not seen as green building or eco friendly to use products with copper or zinc napathane.
When protected correctly, Doug fur constructed homes can last a long, long time. When left unprotected however it can rot real fast.