Grounded27, the concern is mainly a wheel/brake fire during something like an RTO - as the fuse plugs melt you don't want to dump 200 psi oxygen containing air into the fire (think blowtorch). Dumping 200 psi N2 won't extinguish the fire, but it won't feed it either.
So the prime reason for use of nitrogen is to avoid feeding a wheel/brake fire. Of secondary importance is that it's dry (although 'dry' compressed air is also readily available) so you don't have the adverse affects of water in the tire (both corrosion, and dramatic changes it tire pressure due to phase change of the water from liquid to vapor or back).
That lack of moisture is the primary reason for use of N2 for automotive tires. Also, lack of O2 in the tire reduces oxidation damage to the rubber (obviously only for the inside of the tire) which can be of concern on vehicles that don't get used much and the tires can stay on-rim for 10 years or more.