The FireWire protocol is designed for daisy-chaining, that is definitely a supported method to use the hard drive as an intermediate hub.
The problems we've seen on the card are mostly related to the FireWire physical layer chip - it's usually destroyed because a cable was forced in backwards so the power pins short something out. It's pretty obvious when the chip nearest the connector has black marks on it. The RMA'd card was fine. But, I'm guessing that bad cables that are shorting a bit of the power pins to the data pins would cause all sorts of problems. If you can get a cable that doesn't pass FireWire power, that would be an interesting test.
The way I have mine set up, I have a powered 6 port FW400 hub. One cable going to the IF-FW, and one each to the Mac and PC I use for testing. Only one of the computers is connected at once though. The Mac has FW800 only, but the PC has both FW400 and FW800.