This maybe a dumb question.. but I purchased a NRS fuel sending unit for my 39' and the rheostat winding is completely exposed. The original unit had the winding sealed in a can. Since there is electricity in the winding and it is sitting in gasoline, is this not a hazard?

The original was not really sealed. It just had a protective cover over it. Unless you get the correct mixture of fuel and air there can be no explosion or fire.

Most fuel tank explosions are cause by viewing the fuel level aided by the light from a match.

The modern car has an eletric motor in the fuel tank - to run the fuel pump.

Yes and it is a cause of a shorter pump life when you let the fuel level get below a eighth of a tank. The gasoline cools the electric motor while it is running (anytime the engine is running) and the heat will be transfered up thru the cable when the pump is running with a low level in the tank. Sometimes a shorted cable will result from consistantly running with a minimum amount of fuel in the tank or the motor will short and also short the cable requireing the pump, sending unit and cable to be replaced, ( several hundred dollars on a 96 Roadmaster or Caprice, a fire hazard is not too high because air isn't usually present in the non-vented tank with the fuel being recirculated, mostly only liquid gasolne and vaporus gasoline fill the tank.

With the fuel guage sending unit, the current flow is not sufficient to cause a spark anyway.
With the in tank electric pumps, MrMack is right and with all that I have seen the actual motor is fully sealed and the fuel only flows around the motor cavity. If fuel gets into that section it shorts out the motor and it dont work no more.
Tony

With the fuel guage sending unit, the current flow is not sufficient to cause a spark anyway.
With the in tank electric pumps, MrMack is right and with all that I have seen the actual motor is fully sealed and the fuel only flows around the motor cavity. If fuel gets into that section it shorts out the motor and it dont work no more.
Tony

I share MrMack's comment about the gas cooling the pump motor. I had an old Volvo that had the early generation Bosch mechanical fuel injection with a submerged fuel pump. The mechanical injectors would open only when the cylinder was on the intake stroke (negative pressure) and with sufficient (positive) pressure on the fuel line. With the tank near empty the 'heat rise' in the motor reduced the effective psi to the injectors, making it very difficult to restart the warmed up engine. Starting the cold engine was a snap, but restarting was a bear! Sorry to say it took me many repair attempts before I figured this out.
Coach