This is documented on the eCig forum:

http://www.e-cigarette-forum.com/forum/search.php?searchid=18970936

There was a recall on eVod batteries, which I believe is what's shown in that clip:

http://www.e-cigarette-forum.com/forum/new-members-forum/444560-evod-battery-recall.html

There is also uninformed, if not irresponsible product recommendation by some vendors:

http://www.e-cigarette-forum.com/forum/general-e-smoking-discussion/462672-mod-batteries-fasttech-ebay.html

It comes down to electronics and chemistry.

The electronics:  If you use a "protected" MOD (protection built into the device, e.g. Vamo); you can use an "unprotected" battery.  If you use an "unprotected" MOD (spelled 'mechanical', e.g. my FastTech brass MOD) you should use a "protected" battery (protection built into the battery) or be extremely careful about shorts and/or high current draw.  All batteries have a max current rating; best not to exceed that with Li-ion.  The same is true for chargers (she was charging).  If the charger doesn't protect the battery the battery must protect itself.  A little coarse but picture it as an electronic condom; either the man provides it or the woman insists.  :)

The chemistry:  Li-Co (Lithium-Cobalt, the original) is bad chemistry.  Envision Steven Seagal and Angelina Jolie.  Sooner or later something's gonna blow.  Li-Mn (Lithium-Manganese, the latest) is not quite as powerful or long-lived, but much safer.  Protection is still number one.

Bottom line: This was not an eCig failure.  The failure lies in the fact that people can market pyrotechnics and call them batteries with no requirement to identify the hazards within, and no regulation of associated devices.  eCigs will be held responsible however.

-Mike Reed via Email
These comments are an attempt to aggregate information collected from many forum, vendor, and manufacturer's sites.  This information concerning Li-Ion batteries is the result of many hours of personal research and is accurate to the best of my knowledge.  We however make no guarantees as to the validity of this material.  Use this as a guideline only to aid in your own research.