How can I configure MySQL Innodb to handle 1000s of inserts per hour?
You are dealing with a deadlock, not a performance bottleneck issue.

If you have a thousand new records per hour, you are far far far away from reaching MySQL limits. MySQL can handle at least 50 times your load.

Deadlocks are cause by application code and are not the database server's fault. Deadlocks can not be fixed on the MySQL server side, except in some specific situations.

InnoDB can show you detailed deadlock information by running SHOW ENGINE INNODB STATUS at the MySQL prompt, or with mysql -uroot -p... -e "SHOW ENGINE INNODB STATUS".

However, this only shows the last deadlock that occurred, there is no deadlock log. 

Thankfully, there's a tool pt-deadlock-logger which takes care of that problem, it takes care of polling InnoDB status and saves all the detailed deadlock information before it's refreshed with a new deadlock.