Hi there Cupie, we are wood burners and very happy. Some disjointed thoughts on the subject are:
They're really cheap to buy 2nd hand out of Melb, Syd, where wood is just too much hassle now. We bought a "saxon" to heat 35 sq's off ebay for $500, (instead of BBQS galore $2750) flue etc included. A hearth can be bought or built for around $150 or less. Our model only has to sit 150 mm from the wall.
If you were to install one in a double story house, I guess the assumption is "hot air rises" so most likely downstairs. Open fires are not economic but some of these newer glass fronted models burn very efficiently. Remember they do run a fan. Triple skinned flues are the go. (internal copper, then a full skin, then a decorative outer,) they seem to be able to install them in lots of places, through rooves, out through the back etc. lengths are available by the metre.
We don't buy wood because we live on a farm. Prices around here (Central Vic, Bendigo) are about $105 per cubic metre, delivered, split, stacked. Be careful buying by the tonne or metre.
We would burn about 10 metres a year. We burn yellow/grey box and red gum. They all have their own qualities but we prefer these species. A chainsaw costs about $1000 and then you have to use the thing, split, stack and actually keep the thing burning all night. Another thought is make sure its big enough to put a log on at 10 pm and still be going at 7 am when you get up. It can be a pain in the neck if you have to go back to kindling and relight in the morning.
DSE are the mob in charge here. A permit costs about $160 for 6 metres in the bush and as of this year you are only allowed to collect "green" wood, so you need to be a year in front from now. Apparently its to stop theft. There are great discounts on those prices for anyone holding a concession card. I have also heard it wont be long before DSE require you to complete a chainsaw course to be able to buy the permit.
I still have a couple of kero heaters in my shed, but they arent efficient anymore with the price of kero.
We love our fire, sit round it like a telly as a family and wouldn't change that for the world.