It will create an excess of ammonia, and can "foul" the water(wierd stuff in the water, cloudyness), but as far as being poisonous I wouldn't go as far as to say that. I wouldn't recomend keeping it in there if you know about it.
Depends on the size really. An angel could mess up your water quality while a neon probably won't. A 10g will foul quicker than a 100g... etc.
I personally leave small dead fish in my "larger tanks" if they aren't near the glass and easy to scoop out. Most of my other fish have them taken care of in 8-12hrs anyway.
When I find a dead fish I remove it quickly, to avoid the water fouling. Also, I check his body for any sign of disease or bites. Also, doing it quicker makes me less supceptible to the loss.