I believe OFFDELAY is the time the M1-ATX waits before it pulses the motherboard on/off switch.
HARDDELAY is the time it waits before shutting ALL of the power rails off. If your motherboard stops pulling PSON low (i.e. hibernate, standby, or poweroff) before HARDDELAY, then the PSU will respond buy killing power to all rails except +5VSB. +5VSB will continue to be powered until HARDDELAY.
If your PC hangs, then PSON will remain low and the M1-ATX will keep supplying power to all rails until the low-voltage threshhold is set or HARDDELAY is reached. A firmware revision might make it possible for the M1-ATX to have 3 timers instead of two (OFFDELAY, HALFOFF DELAY, HARDOFF DELAY). This would give you the fail-safe you're looking for.
* NOTE: the current revision of the M1-ATX firmware has a bug. HARDOFF=NEVER actually means HARDOFF=~3.5 hours. Contact iTuner about getting your onboard MCU replaced to upgrade the firmware. Search the forums for a thread about this problem.