Description: Ethanol is used as a solvent. Red gum and shellac , two common binders both dissolve in ethanol well. Ethanol/water mixtures are also often used since the ethanol increases the 'wetness' of the water (it reduces the surface tension of the water) and reduces the solubility of common oxidisers.
Hazards: Ethanol is flammable and volatile. Ethanol vapour is heavier than air and spreads over the ground. Provide adequate ventilation when working with ethanol
Sources: Chemically pure ethanol can be quite expensive due to increased tax, unless it is used for laboratory purposes. Denaturated alcohol (usually a mixture of ethanol and methanol) has been made undrinkable and therefore a lot cheaper. It can be used for pyro purposes. Some types of denaturated alcohol exist with other chemicals mixed in besides methanol to make it undrinkable and recognisable as such (colorants etc). I have no idea what these extra additives are and wheter they can cause problems in compositions. I have been using 'spiritus' (a well known type of denaturated alcohol in the Netherlands) for several years without problems.