I think most of the folklore came about when their use became widespread in the RC world. There are some real horror stories about them that may or may not have come about by shorts etc but certainly coupled with poor early batteries and lack of knowledge in handling and charging they where/are potentially dangerous....just three of many on rcgroups....Again I'm not convinced about all the folkllore concerning lipos. I've heard of loads of people that let their lipos go down too far without catching fire when they charge them.
LiPo Fire Pictures - RC Groups
Lipo Fire !!!!! - RC Groups
Li cells can cause a fire - RC Groups