Hi Krishnaji,
Nitrogen is not hot air it is basically an inert gas and cooler gas. however the reply to your queries can be sent to you if you give any other email id I have a complete bunch of research papers done in india and in rough condition to check the advantages of the Nitrogen.
Posted by Krishna
http://www.thetruthaboutcars.com/the-truth-about-filling-your-tires-with-nitrogen/
Not much help to my speculation about nitrogen molecule size, but other than that pretty much supports my line of thought... So, Sharmaji was correct after all!!! Nitrogen is mostly hot air... Well 78% percent of hot air 
Water vapor in compressed air acts as a catalyst, accelerating rust and corrosion. Water vapor also absorbs and holds heat. And when it changes from liquid to vapor, water expands tremendously in volume. As a result, tires inflated with wet air tend to run hotter and fluctuate in pressure more. That's one of the reasons why racing tires, where fractions of a psi can radically change the handling characteristics, are inflated with dry nitrogen.
Posted by Rohit B.D.Binoy, what I gather from that article is (my counter-points in red)...
- Loss of 1.5 psi/month with ordinary air as compared to 1.5 psi/6 months with N2 (hence better mileage, environment friendliness, etc.) - Is it really such a chore to get the air topped up every month? I mean most people refuel approx. every 2-4 weeks and most pumps also have the facility to fill air free of cost. So why not top up air the same time one refuels the car? It hardly takes a few extra minutes...
- Reduction in corrosion if N2 is filled, hence more safety - Is there any definite quantitative data which points to the fact (notion, rather) that tyres with normal air are unsafe? If yes then wouldn't manufacturers have already made (or gone for) alternate tyre materials research or technology? Or at least issued (dire) warnings about the perils of using ordinary air to fill up tyres. This, especially considering that powered vehicles have been manufactured for at least the past 60-100 years most of which (incidentally) use pneumatic (i.e., air-filled tube-type) tyres.
The article also mentions NASCAR, Aircraft and NASA/US military. That does not mean consumer vehicles need to use N2 in tyres. The applications above are a lot more demanding than ordinary driving. For racing, yes tyres are subject to that kind of abuse which warrants N2 instead of air simply because the heat and stresses are so high that it is well-worth the effort to pre-empt any chance of failure and this definitely includes failure due to presence of vapour and/or oxygen in tyres. Ditto for aircraft - a tyre burst on the runway is completely different from that on a highway. Also include the fact that the weather is not always good everywhere. That puts aircrafts in the same risk category as the next point. For NASA/military, yes N2 is required in tyres due to the risk of freezing (of the water content in the air, of course) which may render the vehicles unusable or lead to fatal accidents.
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