Well, yes, you do need to ventilate around the genset; I thought that was obvious...
I read a thread or two about some people who bought two generators. One big enough to run a whole house, and capable of making the 240Vac needed to kick on a well pump, a/c, etc. And a smaller one that didn't drink the gas too bad. I suppose in the summer there's no choice but to run the big generator for the a/c though. I've read lots of good things about the Honda 2kW invertor, enough to make me really want to get one--but I know it won't power my 240Vac well pump (everything else in my house is on 120 though).
That's one of the problems: need at least 4kW to get well pumps and furnaces to start up, which means cost. Every year I think about getting a generator, and wished they made a cheap enough 5kW invertor that I could use on the car. But a 5kW load on the car is like 375A load, give or take. It might be a momentary load spike, but that's still a hefty load.
Friend of mine used his Prius as a genset a few years ago during an ice storm. Obviously not a huge invertor. Just left it in "run" and it would start the engine every so often. Now that's an application I'd love to see built into a hybrid system--an invertor to run the house!