Just checked in here after being away for a while. In addition to using recording equipment, I also fly electric model airplanes. And as such I am very familiar with the benefits and disadvantages of lithium cells.
In my experience, I have never had a cell failure aside from simple loss of capacity. But I have known people who have had similar failures that involved smoke and flames. In one case, the failure seemed to be related to cell damage following a crash. In the other cases, the failures seemed to be due to charger failure and resulting overcharging, but that is not definite. It could be an internal cell failure, unrelated to any external cause.
Bottom line is that most modelers consider LiPoly cells to be dangerous and store them in a fireproof box when not actually in use. Mine live in an ammo box. We also charge them either under direct supervision or in a fireproof container. Mine get charged in that same ammo box. As a cellphone and camera user, I accept the potential for catastrophic cell failure when I charge my cellphone and my digital camera.
LiPoly cells do seem to be more dangerous than older technologies. Possibly because the innards are flammable and because the housing is plastic and not metal? And because the result of an overcharge or internal cell failure is a fire? NiCd and NiMh cells would simply fizz and vent but I have never heard of one that actually caught fire.
FWIW, there is an ugly little secret about LiPoly cells that Microtrack owners should be aware of. And that is that LiPoly cells begin to degrade as soon as they are manufactured. This degradation continues for the life of the cell. It is accelerated by elevated temperature and higher state of charge, but the bottom line is that it continues regardless of whether you use your device continuously or leave it on the shelf. And since the degradation is worse at higher states of charge, the common practice of leaving the unit fully charged accelerates the process. On the other end, if you leave it discharged, the degradation is lessened.... but if the unit continues to draw a small amount of current in the OFF state, the cells can be discharged below 2.5V/cell and that will seriously accelerate the degradation. In my electric model airplane experience, I get about 1-2 years max on cells before they have degraded to maybe 75% capacity. Sometimes less. Problem with the Microtrack is.... the cells are not user replaceable unless you want to open the case yourself and can find suitable cells. It's the same issue I have, for example, with the iPod. The degradation seems to be mostly an increase in internal resistance, so the relatively low current consumed by the MT may reduce the impact of the degradation. But the battery is definitely life-limited.
Paul