Unless you're planning on running the light in a small closet , I don't see it being much of a problem . I've ran my finned M-1000 for over an hour in the house with no ill effects other than the room getting substantially warmer ! I'm gonna say that what your smelling is either dust or fingerprints burning off the lamp . That being said , if the fixture has a plastic lens/refractor I'd recommend running it positioned as it would normally be situated in "the wild" as not to expose the plastic components to heat in ways they normally weren't designed for .
HID CAN be used indoors with no ill effects. Just look at warehouses , arenas , ETC . Our paint dept. at work was lit by HID for years with no issues ! The temp in there can reach over 130°F at ceiling height during the summer !(I know this cause I've been up there in the scissor-lift running new compressed air lines )
HOLY CRAP IT'S HOT UP THERE !!!