Bit-Tech.net said:An man from Atlanta, Georgia found himself in a nasty situation when his iPod Nano caught fire.
Danny Williams said that his iPod caught fire while it was in his trouser pocket. The fire, which lasted almost fifteen seconds, reached his chest before it was extinguished.
The fire is believed to have originated from the lithium ion battery which is similar to the ones involved in laptop battery recalls.
While this doesn't seem to be a widespread issue, Apple is taking note of it. Apple has vowed to replace William's iPod after doing a thorough examination of the malfunctioning unit. If a major problem is identified, a massive recall could end up being issued.
http://www.bit-tech.net/news/2007/10/08/ipod_nano_bursts_into_flames/1
Thank god I don't have a nano