This article in Conformity Magazine summarizes recent safety testing of Lithium Ion batteries, it also has a link to the full report.
As embedded systems designers we have a responsibility to pay careful attention when we use newer technologies like LI batteries in our products. There have been many very safe designs with LI batteries but due to their nature a totally safe design is not an easy task. So please resist the temptation to cut corners when you design a potentially dangerous device into your latest gadget.