An iPhone 4 was reported to have exploded on CrunchGear. It was experienced by one of their readers who sent all of the photos to them. According to Omar, his iPhone 4 went literally on fire on their wooden table. ,The battery of his iPhone 4 caught on fire.
The exploding battery (if it is indeed the battery) is not new. In 2009, a 17″ MBP battery exploded (via MacRumors Forums). Here are the other incidents that was reported: iPhone blew up in France, iPod went pop, and iPhone 3G burned his car seat.
The said incident could be due to overheating just like the battery issues of iPhone 3GS.
While this didn’t happen to a lot of people Apple should treat this incident seriously since it is a safety issue. I hope Apple would investigate on this really soon.