It is non-toxic but the FDA considers it a non-food product meaning they don't think it should be consumed. That said, I used luster and pearl dust on my shells on my beach wedding cake (in pics) and no one died from eating one chocolate shell. But to cover yourself you need to tell them they are not to be consumed. I have seen edible, FDA approved dusts for sale but they don't have a shimmer like luster dust but are more like petal dusts, if that's what you need and they are more expensive too.
i wrote to wholesalesugarflowers.com about this and they replied back..they said that it is non-toxic but should not be consumed in large quantities..i know, i was disappointed too coz i love the way they look on fondant...
I use them all the time and so do so many of the big-name professionals out there. I figure if they can do it, so can I--they haven't killed anyone yet--at least no one that we know of.... 
Look at it this way--how many crayons did you eat as a kid? They are non-toxic, but also not intended to be eaten in large quantities. It is not like people are eating entire luster/pearl dust covered cakes individually--they get a small slice--a couple of shavings of crayon.
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