[azmanam]

Well... your equation is partially correct.  When you burn carbon monoxide (with oxygen as the oxidant) you do in fact make carbon dioxide (and you apparently get a nice blue flame).  Under physiological conditions, carbon dioxide will not be made from carbon monoxide and molecular oxygen.  It is as described above: CO falls off hemoglobin and O2 preferentially binds thanks to the large concentration and Le Chatelier.

[typhoon2028]

I could be wrong, but I always thought carbon monoxide poisoning worked the following:

The the bond between heme and CO is stronger than the bond between heme and oxygen.  The bond is much weaker for CO2 and heme.

The strong bond between heme and CO, results in the body taking in less oxygen.  As the lungs do not exhale CO as efficiently as CO2, because of the strong heme and CO bond. 

20% oxygenated air is not sufficient for the body, when poisoned by CO.

I suppose La Chatlier's principle affects the desorption of CO from the blood.

[Yggdrasil]

I could be wrong, but I always thought carbon monoxide poisoning worked the following:

The the bond between heme and CO is stronger than the bond between heme and oxygen.  The bond is much weaker for CO2 and heme.

The strong bond between heme and CO, results in the body taking in less oxygen.  As the lungs do not exhale CO as efficiently as CO2, because of the strong heme and CO bond. 

20% oxygenated air is not sufficient for the body, when poisoned by CO.

I suppose La Chatlier's principle affects the desorption of CO from the blood.

Yes, I would say that is an accurate description of the process (esp. the last sentence that 100% oxygen would increase desorption of CO from the blood).