There is nothing against the code to install a back water valve inside the building. The valve is sealed tight so you will not get any odors. It does need to be able to be serviced which is recommended to be done yearly. Just putting in a backwater valve will only solve the trouble of the city sewer backing up into the building. A flood control is a much better solution. Most flood controls are installed outside, which requires a manhole to be installed with the backwater valve, an overflow pipe on the house side of the backwater valve and a ejector pit/pump. When the city sewer backs up the backwater valve is forced closed preventing the city sewer from backing up in the building, but now the building waste water can not flow out anymore so it will leave out of the overflow pipe into the ejector pit, the pump will then pump the buildings waste water out beyond the backwater valve.
Now there is an inside version of a flood control system you can install by Tramco, its called the Tramco 960 http://www.tramcopump.com/Residentia....cfm?ProdID=26
Here is the only requirements by the City of Chicago for installing a flood control
Contractors installing flood control systems must submit the following to the Department of Water
Management for approval before a permit can be issued:
1. A copy of the contract, signed by the owner, stating the work to be performed.
2. The horsepower, discharge size and capacity of the pump to be used.
3. A sketch of the lot with dimensions showing the building, existing downspouts and all work
to be performed.
4. Downspouts are required to be disconnected prior to the installation of a flood control
system. The Contractor must inform the homeowner in writing, as part of the contract
whether the pump is sized to carry the roof drainage if disconnection is not feasible.