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Seeds can contain poisons but it's usually in trace amounts, so not enough to kill you. Appleseeds contain cyanide for example, but I've never heard of anyone dying due to chowing down on apple cores.
http://www.drgourmet.com/askdrgourmet/peachpits.shtml#.VMt2yS6WlnI
A 10 gram peach pits would contains ~9 milligrams of the cyanide compound found in fruit. But they use the same compound in anti-cancer treatments and administer up to 1500 milligrams/day without any problem. So you'd have to eat 1.66 kilos of raw peach pits to get 1 days worth of normal medical dosage of cyanide compounds (the compound failed to treat the cancer but that's not the point here ).
Boiling actually removes cyanide from foods, making even highly cyanide toxic cassava completely edible (if not boiled, you die), and you'd have to boil the pits a lot to make them into jelly, so I'd say peach pit jelly is probably perfectly safe considering how much you'd have to eat even before it's cooked to be dangerous.
The 1500 mg/day appears to be for the drug derived from peach pits, not cyanide. The LD50 for cyanide is in the range of mg/kg of body mass, so chomping down on even 10 raw peach pits would be dangerous. Sufficient cooking will still make it safe.
Many stone fruit pits contain amygdalin, which can produce hydrogen cyanide during digestion. 1g of amygdalin produces at most 68mg of hydrogen cyanide. Peach pits will typically be 3-5% amygdalin by dry weight when the fruit is ripe. the LD
50 for ingested hydrogen cyanide is 1-3mg/kg body mass. Hydrochloric acid (the main acid in the human stomach) breaks down amygdalin without producing cyanide. Several other digestive enzymes also break down amygdalin either without cyanide production, or with less than the theoretic maximum cyanide production. It also decomposes safely in the range of temperatures commonly used to cook food, and decomposes safely (but takes months to drop to undetectable levels in stone fruit pits) if sufficiently dried. I've read (but don't recall the source) that a typical healthy adult can ingest up to 5mg/day of hydrogen cyanide with no ill effects whatsoever, and up to 10mg/day with no ill effects beyond extra stress on the liver that day. Unlike amygdalin, free hydrogen cyanide can not be rendered safe by cooking. Fortunately, very few plants contain free hydrogen cyanide in significant amounts.
Given those figures, a 10g (assuming dry weight) peach pit would likely average around 300mg of amygdalin, which could theoretically metabolize into 20.4mg of hydrogen cyanide, but would probably produce much less. So eating a few raw peach pits on occasion probably won't cause any real harm (unless we're talking someone under 20 kilos, like a child), but making them a significant part of your diet or using them as animal feed is a really bad idea. Sufficiently cooked, they could reasonably be a food source.
If anyone cares, I found out most of the above information a few years ago while researching the historic use of the bark of the chokecherry tree as a flavoring agent.
As to the topic of what to do with your surplus worthless seeds? caravans will buy some that I can't find any other use for, others they won't. Atom smashing, tossing in magma is the only way to get rid of the ones that can't be traded. If you go the route of letting them sit around until they hit the cap for individual seed types, I'd recommend turning up the global seed cap, since you could end up with several different useless seed types sitting around at the per-type cap pretty quickly.