The melamine used in racks is melamine resin which is the plastic coating on the wood. The melamine used in the China food fraud fiasco is melamine powder that has been added to food items such as wheat gluten and milk powder.
The reason that melamine is added to food is because it is very high in nitrogen content. What is looked for in food to determine protein levels is the nitrogen content using certain chemical tests that they run. The higher the nitrogen content of the food item, the higher the protein level. Melamine powder is added to the food stuffs to fake a high protein content so that they can use cheaper fillers and additives and still appear to have a product that will pass inspection for acceptable protein levels even though the actual content is much lower.
Melamine in high enough levels has been shown to cause liver damage. So in addition to consuming a product with no food value because it's protein content is a fake, you're also damaging your liver.
However, there is a big difference between ingesting a chemical and living in a rack manufactured using it as a coating. And as I said before, I've got a melamine rack with snakes that are 15-20 years old and they appear no worse for the wear.