Realistically speaking, this was probably the LiON battery.
Almost no one uses polymer LiON's, so this was the usual electrolytic battery. They've got a circuit in them (which amounts to little more than a couple of diodes to prevent back-current and an AVR) to stop the battery from "flip flopping".
Rechargable batteries can invert a cell if you run them down too low. Nickel cadmium, metal hydrides, and even lead acid batteries can do this. When they do it, you start liberating hydrogen gas while it charges.
Dell uses the absolute minimum quality parts for their machines, and rely on testing to sort out the bad parts. Taiwan -- notoriously, I might add -- stopped nearly every form of QA known in electrical engineering, several years ago. Manufacturers decided to let OEM's quality-assure their own products, instead of the plant. Failure rates in memory alone jumped above 10% (from something like 3%).
So, just like army weapons are made by the lowest bidder, so too is Dell's batteries and charging circuits.
This is why you never run a LiON battery down to shutoff. The circuits (inside the battery itself, as well as the device) are usually set to shut-off at 3.3v, well above the "critical" 1.7v. But my first guess would be the battery was used heavily and run down to under 3% on a consistent basis. That's just asking for a smack upside the head. Even cell-phone batteries will do this same feat.
It's still funny to see the guy in the foreground trying to shutdown his laptop before getting away from the fire.
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