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They're fairly common these days, especially considering all dwellings in California are now required to have CO detectors.

Carbon monoxide is lighter than oxygen and carbon dioxide, about the same as nitrogen. All things being equal it will slowly rise in a room.

The reason carbon monoxide is a threat in the lower levels of your house is not because it sinks but because that's where your furnace and hot water heater are.

Combined smoke and CO detectors are fine (and there are many on the market today).

One would think that CO produced by combustion would rise before it fell.

You are both right, in a way, in that neither particularly matters: http://www.newton.dep.anl.gov/askasci/chem03/chem03364.htm

"As would have been predicted by the Second Law of Thermodynamics, CO infused anywhere within the chamber diffused until it was of equal concentration throughout. Mixing would be even faster in the home environment, with drafts due to motion or temperature. It would be reasonable to place a residential CO alarm at any height within the room."