It seems that the typical result is a popped cell and venting, but no fire. But John did have some heat with his defect 4s pack. It wouldn't take much of a spark to ignite what vents when a cell pops.
I just store anything less than a good pack outside. I'm a cheap bastard and perpetually broke, but I won't keep a shit pack in use, or bring it inside. You guys gotta buy an extra pack or two so you can do that.
Even the good stuff is stored in metal boxes that isolate 8 packs max per box, and I keep it in a fire resistant place, a tiled fireplace hearth.
THE LIPO RULES. NEVER ABOVE 4.3V NEVER BELOW 2.7V DON'T PUNCTURE
Ideal charging /discharging range for Lipo, 3.65v minimum 4.1v maximum
See battery technology section, FAQ thread at the top of the page for lipo noob info.