For what it's worth, I would like to jump in here if I may.
I've read Ross' and Bill's responses, along with some others, and some good points have been made.
1. The labels on products are becoming increasingly "informationally saturated". With liabilites being what they are, and everyone becoming more and more litigation-happy, manufacturers are having to provide these "mini-MSDS" in an effort to cover their hind parts. They have no clue whether the user is building models, repairing autos at 5 tubes a pop, or sitting in an alley sniffing the stuff out of a plastic bag. Manufacturers are providing GENERAL information in hopes of trying to cover all the bases where use (or abuse) can occur. With that in mind....
2. ...Common sense is authorized. The amount we modellers use is relatively insignificant compared to say, auto/truck body shops. Exposures are driven by the frequency of use (how often), the duration of use (how long), the product used, the ingredients, and their concentrations. Using a few toothpicks full of putty over an intermittent 30-minute period to cover a seam in your 1/48 kit does not equate to a significant exposure. Most putties (auto body-type lacquer putties) are nothing more than thickened primers. If you were able to instantaneously vaporize about 60ml of putty (that's a lot!) in an averaged size room, the concentrations in air of the all the putty solvents would be less than the thresholds needed to cause a bodily effect.
I think I would be more concerned about having a pregnant wife drinking one beer every night than I would having her stand over me for 10-15 minutes while I apply a half-ounce of putty once or twice a week (Both ethanol and toluene have potential reproductive hazards associated with them.)
3. Smelling a solvent does not mean an overexposure is occurring. See no. 2 above. Most organic solvents have an odor threshold several orders of magnitude below any dose-response effects. Even if higher doses are received, the body has a remarkable means of metabolizing and excreting toxicants. Generally speaking, problems (symptoms) arise when toxicant intake exceeds the body's metalbolic rate.
(My wife, too, will complain about the odors coming from my modelling area, but will sit in her chair in the den for an hour and remove all of her nail polish and then repaint her fingers and toes without making a peep.)
4. Does this mean precautions should not be observed? Of course not. Minimally, protective gloves (nitrile) and eyewear should be worn. Using putty in a well-ventilated area should also be observed. I would also ensure the baby is out of the way before applying solvent-based materials like paints. Aerosols will increase exposure potentials much more quickly than semi-solids.
Use your putty appropriately, take the proper precautions, and you should be just fine.