i am onto a similar project    building a waste oil "furnace" from scratch based on the clean burn brand 250,000 btu model.   after setting up a nozzle pre heater to thin the oil on a temperature thermal disc sensor to delay actual startup until nozzle gets to temp. then relay activates thermostat input to standard oil burner controller with flame sensor.   added relay operated by thermal disc switch to activate blower fan when heat chamber gets to temp. just now picked up an arduino with the intention of running the whole unit through a 4 channel relay board . the programming is the challenging part to me, with very little programming experience. maybe get lucky and find someone smarter than me at programming  with a functioning program i can work off of. i will admit,i am more hardware than software 

This more of a general comment for anyone who decides to use an Arduino as a controller for a potentially hazardous application - An Arduino has no CE or UL approval, nor does anything you create, and if damage results (in this case let's say the house (G-d forbid) burns down) insurance WILL NOT cover the loss.  Even worse, if someone is injured or killed the liability will be entirely on the person who built the device.  

I'm posting this not as a specific critic of this application - but anytime we "makers" move our devices out into the world we need to evaluate the potential risk involved.  

Good point and I actually thought a lot about the possible risks. I'm aware of potential instability of the whole controlling syste (hw & sw wise). By replacing the old unit I still tried to keep all risky functions out of the microcontroller's hands. For example the pre-heating chamber's temperature is controlled by a simple thermostate regulator and has another shut-off switch once the temperatue should go over the top.

I'm constantly re-analyzing the hardware and software and trying to make it more bullet-proof.

With the number of older homes and out buildings that use this type of equipment you might have a pretty good market for a product there!

similar thoughts    my design has redundant safety's as well.   intention is to have micro controller operate the heater. get the system "dialed in" take readings on " normal" operating temps ,time allowed to detect flame ,shut down delay time if flame not present or for some reason goes out during operation. then have mechanical redundancies .  i.e. thermal over limit switch on heat chamber much the same as a standard furnace has. forced draft blower operation to evacuate any possibly explosive fumes that may build up prior to reignition etc. but any suggestions to what i may have forgotten to take in to account are greatly appreciated. and it is (at least in my location, new york state) possible to have a unit tested and certified "safe"   but have not looked into it much as it is still a work in progress and will be located remotely to eliminate any catastrophic damage if it were to fail. 

That's interesting - I've seen waste-oil heaters for garages, but never one installed in the house. Did the Arduino controller get it up and running again?

The controller is already working since about a year. I just had no time to post it somewhere.

Meanwhile I could improve and optimize some parts in the software and make it generally more "intelligent".

Actually the burner itself is mounted in a big boiler so it's not blowing the flame out into the air but rather heats a primary circular-flow which is common for fossil-based heating systems. I will post a video soon so you can.