Indeed, most metals will burn violently when "finely divided", ie powdered. You may be thinking of magnesium, another metal that when properly alloyed has excellent mechanical properties but is terribly prone to corrosion (and therefore not widely used for flashlights) unless properly protected. Titanium is highly inert under normal conditions because it (like aluminum and stainless) forms a highly adherent (and inert) oxide layer immediately upon exposure to air.
As for buffing out surface scratches, thats certainly a good way to manage scratching if your so inclined, but I still don't think it should be any easier to do this for titanium versus stainless steel. Again, it probably also depends on the surface finish - for example if you have a "brushed" finish on stainless, and you want to maintain the original finish, you probably don't want to go at it with a scotchbrite pad. The same goes for titanium, buffing out scratches may permanantly alter the original finish.
I believe that's where Kiessling is coming from being a fellow Surefire Titan owner. The Titan has what I would describe as a slightly textured, almost matte finish (bead blasted?). If you were to try and buff out a scratch on the Titan, you would have to buff the whole light and end up with a totally different finish (smoother and shinier I would imagine). I really like the original Titan finish, so I will just let the scratches accumulate - it adds character!
You have to be realistic with an EDC, unless its coated with CVD diamond or some such high tech coating (don't forget HAIII aluminum, its certainly quite good if done right) you WILL notice signs of wear almost immediately. Them's the breaks.