So I have been taking Cayenne the last couple days and been making a tea, putting it on food, etc. This site says the maximum dose of the Oleresin is 1.2mg, but doesn’t say how much powder is safe to eat. Are there going to be bad side effects or health problems (other than heartburn or a burning mouth), if I take, a teaspoon or two a day?
A burning mouth is the least of your worries… just wait till it comes out. 
Ah, yes, as the classic speech went:
After my stint judging the Texas Chili Contest, I went home and ate all my daughter’s Popsicles. Every one that was in the house.
Eight hours later, I wish I’d saved just one.
If it helps, Epimetheus: I don’t know nuthin’ about it. So it probably won’t kill you.
If it puts you into renal failure, of course, don’t blame me…
forensic pathologist
I can’t imagine a teaspoon or two a day being a problem. Let your body be your guide. If you’re geting heartburn or an upset stomach or burning bowel movements, then cut back. Heartburn shouldn’t be taken lightly as it could be an indication of larger problems in the future.
What is the reason you are taking cayenne?
Well, the slight thermogenic effect as well as the increased circulation and heathly benifits to the heart, not to mention the yummy taste of spicy stuff. 
Well, according to the never inaccurate Wiki, if your skin turns blue, you have trouble breathing, and you go into convulsions, it’s time to cut back on the hot stuff.
Some discussion of how much constitutes an overdose is found here: