I have been told that smoking with fruit wood that has bark on it is poisonous. I also have been told that there is nothing wrong with using 'barked wood'- that it is only a matter of personal taste.
Which is true?
It depends on the wood if it is desirable or not to smoke with the bark still on the wood. I have had good results smoking with apple wood bark, but disgusting results with birch (birch bark gave off heavy soot).
Is it poisonous? Well, I am still alive, but that's anecdotal.
I have been smoking meats for some time now (the really hard part is keeping the rib-eyes rolled up tight and lit). But seriously, I have yet to be poisoned by any bark from any of the wood I have used, and I have used them all. I have heard that there are some potential carcinogenic issues if you are constantly eating heavily smoked meat, but I do not have any facts to base that on. I think the primary issue with tree bark is that it will typically add a bad flavor to the meat and make it taste much more ashy and sooty (not very technical terms). Also, if you are in a competition, the bark tends to make much more smoke which can throw the look of your meat off when presenting as well.
Overall, I would say it is a best practice not to use the tree bark. However, I cannot say that it is due to specific health risks.