If you set it up right, there is no significant harm to the engine. It will wear a little bit faster, but only when you are spraying, and the wear is only proportional to the extra horsepower produced. Unless you are an idiot and use a jet size too big for your engine, or aren't feeding it enough extra gas to prevent a lean-burn situation. That would destroy it very, very fast.

The only question left is legality. In my state of Virginia, it is illegal to have a working nitrous system in a car. As long as the bottle is not connected when driving, you're good. I've been asked by cops before if my car had a nitrous system (I don't, but I had a few extra switches in my car for other things) if I did, and they found it, they would have towed my car.