So, let me get this straight... he says that he thinks the cause of the iPhone 4 catching fire was because of it's lithium-ion battery, yet when they offer him a NEW iPhone 4, he declines because he thinks that one might also catch on fire, but instead asks for an iPhone 4S or 5 when they also use a lithium-ion battery... because that makes sense. Honestly, these stories just piss me off. This guy acts like he's entitled to a free iPhone 4S or 5 just because he's been a longtime Apple customer.
Lithium-ion batteries are known to possibly catch fire/explode under rare circumstances. This isn't an issue with Apple, it's an issue with ALL lithium-ion batteries. The fact of the matter is that there is no better battery technology out there right now. EVERY mobile device manufacturer uses lithium-ion batteries to power their devices. The one thing I do agree on, however, is that they should've told him whether the smoke was toxic, but in Apple's defense, if he's fine now, chances are it wasn't toxic. Also, a quick google search could answer his question whether it was toxic or not.