Some research via Google looking for an Insteon SDK only yields stuff from way back in 2005. There's only information on serial port interfaces (no USB) and the only language mentioned is something called DockLight scripting that also looks like it hasn't been updated since 2005.
X10, on the other hand, boasts support for C++, VisualBasic, VB Script, and JavaScript. No .Net listed, but VisualBasic/VB Script likely implies a COM object you can easily import for use in C#. They're also much more USB friendly, and the kit costs 1/4 of the Insteon kit ($50 vs $200).
If you were actually building a product I would understand the reliability concern. But since this is a home project I think you'll have much better luck with X10.
