Re: VBAC=Induction? WWYD?
The book "thinking woman's guide to a better birth" had a lot of info on this topic. I've already returned my copy or I would look it up for you. She also has a lot of references in there (i.e. 1/3 of the book is references to scientific studies, etc). Basically I believe she said that although using pitocin on a VBAC uterus raises the risk of rupture, it is still less risky than doing a repeat c-section.
However it really sounds like your providers are not very supportive of VBAC, despite saying that they are. They are kind of setting you up to fail at your vaginal birth plans with all the restrictions they are putting on you (and I'm guessing there are more that you haven't even heard of re: how fast you have to progress, etc). Just keep in mind that it's your body, you're the boss, and stand your ground. Personally I'd labour at home for a long time to avoid the cascade of interventions. Good luck mama!