Jonathan Smith,
NOS isn't a problem when used properly. But that is the key. Most people get greedy and put a 150HP shot into a motor that only puts out 75HP and what do you think will happen? You get a serious meltdown and a fried engine.
NOS is just a oxygen adder. to make HP, you need Oxygen, Fuel and a spark. All the kits I've seen comes with a solenoid that puts more fuel as well as NOS into your engine. Just adding NOS will lean out the motor and cause BIG PROBLEMS.
Typically, it's best to use an engine that is built to run NOS, but if you stay small in the Power Shots, you
should be OK. It all depends how you strong your existing motor is, how heavy your right foot is, etc... (lots of variables)
BTW, Hot VW's did a series a while back on building an NOS VW Engine. It might be worth picking up the back issues.
Cheers,
Doug