1. They recommend that the VFD be the last thing between the power supply
and the machine - no on/off or reversing switches between the VFD and the
motor.
They warn that use of such a switch may smoke the VFD.

Older VFDs would tend to smoke, newer ones would trip. As others have
indicated, there is no advantage to doing reversal or run/stop this
way. You should definitely wire up signal switches to the control
input terminals and let the VFD do its job.

Although it's probably more applicable to metalworking than woodworking
machines, there are times where I'd like to be able to instantly reverse a
motor,
or to bump it on and off.

Reversing can be handled by a single toggle switch wired into the
control input terminals. "Bumping", in VFD parliance, is called
"jogging". Means the same thing. Very quick reverses can be achieved
by changing two parameters in your VFD's configuration.
"Acceleration" controls how quickly the motor will accelerate to reach
a new, higher setpoint (works generally with either starting the drive
from 0, or changing from, say, 50% speed setpoint to 75% speed
setpoint.) Similarly, "Deceleration" controls how quickly the motor
will decelerate from the previous speed setpoint to a new speed
setpoint, possibly 0 if you're stopping the motor. Clearly, a
reversal involves decelerating the motor to 0, and then accelerating
the drive to the same speed setpoint, but with a sign change (meaning
the motor is turning the opposite direction!). If you experiment with
the "Acceleration" and "Deceleration" parameter values, you can
achieve a very quick reversal.

I've heard that if you use a VFD that is well oversized for the motor in
question, you can get away with the on/off and reversing switches downstream
from
the VFD. Anyone have any experience with this?

You're headed down the wrong path here. You might be able to get away
with this, but it is easier and cheaper to follow the manufacturer's
suggestions. Wire a little reversing toggle switch, and start / stop
pushbuttons, and a potentiometer for speed control if you like. I
would really truly NOT bother with plug-reversing the VFD's outputs.
You'll have to oversize the drive, and it won't be anywhere nearly as
reliable as simply using control switches.

2. The VFDs - or at least some of them - are reputed not to produce a smooth
output current, but rather one with harmonics or noise that can fry some
older motors. Almost all newer motors are supposed to have insulation
that is rated for inverter use.

How old does a motor have to be before it is cause for worry? How reliable
are older motors when used with VFDs? I'm talking about normal use, and not
using the VFD to run the motor at 30% or 300% of its rated speed.

Older VFDs had a lot of harmonics in the outputs. Probably some new
ones do too: look for a specification on the VFD called "Total
Harmonic Distortion", or "THD". Lower is better.

On the motor itself: "Inverter Duty" or "Inverter Grade" is a
unit-less indication that the designer of the motor intended it to be
run at less than 100% speed and still not heat up enough to destroy
itself. I do not know of an exact specification for these terms.

The nameplate of the motor will almost always contain a reference to
the "Insulation Class" or just "Class". This is a reference to how
hot you're allowed to run the motor before it fries. The classes a
"Class A" max is 105 degrees C
"Class B" max is 130 degrees C
"Class F" max is 155 degrees C
"Class H" max is 180 degrees C.
Now, ambient temperature of the environment around the motor comes
into this too. In a situation where you're just running the motor at
%100 speed, things are pretty straightforward. You take the ambient
temperature, add to it the "motor rise" temperature off the nameplate,
and if that is less-than-or-equal-to the Class temperature, you're
fine and won't burn up the motor (too quickly). The problem is that
"Motor Rise" assumes 100% speed; the motor will run a heck of a lot
hotter if you run it at 50%. How much hotter is generally not on the
nameplate, but it might be in the spec sheet for the motor, or the
motor manufacturer might be willing to tell you.

Now, here's a few comforting facts:

1. Old motors generally have a lot of iron in them. This is good for
cooling.
2. Modern VFDs (last 10 years +) work good; low THD, better
protected, harder to smoke.
3. As long as you don't go with the "reversing plug between the VFD
outputs and the motor" idea, you're not likely to smoke the VFD.
4. If the motor does fry, modern motors are cheap compared to their
respective VFDs.
5. I've run some pretty old motors off vintage 1982 VFDs and so far
haven't blown anything up (obligatory meaningless anecdotal data
point).

Thanks,
John Martin

Yer welcome! Hope it helps.

Dave Doerschuk