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Wind load and pile depths for wooden fences (San Jose)

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This is my first email to this alias. I realize that this topic was touched upon in a December thread. I also apologize if the length violates normal etiquette:

Being a  mechanical engineer, I know just enough be to dangerous, when it comes to S.E. codes. My engineer-wannabe neighbor and I need to rebuild a common 8ft tall fence, and have differing ideas. He insists on rebuilding the fence with 2"x3" (.187" wall) MAC A500B posts. I think that this is an expensive, complicated, overkill and that 6x6 pressure-treated fir posts will be as good or better than steel ones. The neighbor is also convinced that the posts need to be sunk only 2' into 4' deep (1' dia) concrete piles. Finally, he is intent on not applying any corrosion-resistant coating to the posts.

So, I'm trying to determine if steel posts are really worth all the time, trouble and expense, compared to 6x6 fir. I'm looking at which type of post can sustain a higher bending moment, and am also trying to determine the proper depth for the piles.

Some additional info:
  •  I understand that most of the local S.E.s in San Jose use wind loads of 15-20psf in their calculations. This seems to correlate with an ~80-100mph wind.
  • MAC A500B posts have a yield strength of 46ksi.
  • Fir posts have an "allowable stress" (constant load in bending) of about 1.5ksi and a MOR of about 12ksi. However, I can't find any yield stresses, for a fir post in bending.
  • Local fence builders typically use 1' diameter piles that are half the height of the fence (4' deep piles for an 8' fence).
  • Using Yo Ratanapeanchai's spreadsheet (ASCE 7-05), I treated the fence as an 8' x 8' sign sitting on the ground, which resulted in a pile depth of 6.5' (1' dia) for 90mph winds. A typical 4' deep pile can only sustain a 50mph wind. (Assumes factor of 2 allowable increase and 100psf/ft lateral soiling bearing).
  • Interestingly, the spreadsheet yields a lateral stress of 802psf, which I understand would be at 1/3 depth of the pile, which doesn't seem to correlate with the 100psf/ft at this depth.

Questions:
  • What is the yield stress (or stress when the outer fibers are damaged) of pressure treated fir posts?
  • What is the bearing pressure that soil can sustain during short duration loads (such as wind gusts)?
  • Do MAC A500B posts form a "self sealing" or passivating layer of corrosion that will inhibit further corrosion, or do they require further treatment, if exposed to the weather?
  • Is sinking a post only half way into a concrete pile a good practice? It seems to me that the pile can crack just below the post, rendering the lower half useless.
  • Is there a typical factor of safety designed into building code equations (1.5? 2.0?)?

I don't need perfect answers, but I do need to make reasonable comparisons between the options. Any advice is appreciated.

Jim Ammon, P.E.