Small flames were noted in one of the two incidents reported when gases escaping from the battery were ignited by an electrical short-circuit in the presence of ambient oxygen, but that was all external to the batterycase.
Of course, there is still quite a bit of work to be done to make this work: iPhones do not have removable batteries, nor do they support multi-tasking, meaning that some sort of ruggedized, battery-powered externalcase would be necessary to get this battle-ready -- as well some jailbreaking.