Does anyone have any ideas about correlation between speed of tune (slow air or fast jig, etc) and appropriate amount of ornamentation, or is the correlation more likely to be with style ( Irish, Northumbrian, Appalacian, Breton, Shetland, etc)?
Personally I a great believer in just doing what sounds right to you, even if its not what anyone else does. i.e. don't think of playing in any particular style, but in your own style. Obviously listen to all sorts of players, but at the end of the day do what suits you and what sounds nice to you (which may be just the basic tune).
On the original question I would second what Chris said, i.e. you need to know the basic tune well before you get too carried away with ornamention. In that way you can always drop back to basics if required.