The press has completely blown this out of proportion because they didn't do their homework before announcing it.

This applies mainly to Lithium Metal batteries (the non-rechargeable type, such as CR123) and not to the more common Lithium Ion or Lithium Polymer batteries commonly found in cameras, cell phones, and laptops. As mentioned before, it also only applies to checked baggage. Lithium Metal batteries are considered dangerous because the lithium is not chemically bonded to another material, so if the battery were cut open raw lithium would become exposed to air and react violently. Lithium Ion and Lithium Polymer batteries can be cut open without having this reaction (although I still wouldn't recommend it). Explosions due to shorting are only of secondary concern.

Unfortunately, most people are clueless to the difference and take the press at their word. Just wanted to set the record straight, for all the difference it will make.