The smoke from a nicad is probably not worse than that from a lipo but posionous smoke is posounous smoke so not worth debating cos if it kills or seriously injures someone it's has the same relevance. As far as burning insulation is concerned you can get 'low smoke, zero halogen' insulation on cables but it's probably not worth it. The problem i see is in the amount of smoke produced and the speed it is probuced. OK, we're talking worst case scenario here but the toxicity issue is one thing. No-one is going to die from breathing it in (not from poison but you can die from smoke inhalation). Visibility is an issue.

Can debate the scientific theory and the possibility of stopping a lithium fire but the practicalities are very different. On board foam type fire extinguishers are a solution but the weight probably defeats the reason for using them anyway. Easily removable panels to allow you to drop a bucket of sand on it defeat the need to contain the batteries etc.

I agree containment is used for car spraying, toxic installations (part of my job and did a lot of work for Wellcome Foundation in their labs so fully conversant with filters and the like) The problem I see is the practicality of doing this in a mobile arena. Big volume to be ventilated quickly = big fan.

Good chargers will deal with a lot of the issues for lipos but they will not deal with all of them. An increased internal resistance of an undersized battery will generate heat which is the main factor in starting the chemical reaction. In feathers the load is very low (I know about the power drawn for spinners but is this comparable to a stalled mag motor?), there is probably a factor by which the battery should be oversized to provide some headroom for the power discharged when a speed controller throws a wobbly and sticks them in full forward and they virtually stall against the arena wall.

Again, I am sure you will tell me that particular elements of that are wrong but the general point is that a fault in a heavy, particularly if the motors were stalled, would draw significantly more power than in a feather. Over sizing batteries is a way to go but by how much?

This raises the issue of what is the correct fuse size for this? Anyone done some research on the amount of current a particular lipo can take and for what duration?

You can make the rules foolproof, but then mother nature will appoint a better fool. Made me smile that did Absolutely right but that doesn't mean we shouldn't question everything and make it as safe as possible.

Anyways, putting aside all the issues above, if you have a lipo fire and the smoke is contained in the arena and everyone is ok, the time it would take to ventilate the arena would be a commercial issue as it would mean a stoppage of at least an hour (ok a guess but a realistic one) to get back up and ready to go. Is this acceptable even once? Smoke panics people more than fire, it is a much bigger problem in most evacuation situations than flames or heat. It makes people act irrationally and they can injure each other. We talk about containing things in an arena but the smoke will spill out of a net roof and there is probably enough of it to do so from a lipo fire. You cannot guarentee a crowds response, who in the crowd will have a reaction to it etc etc Here's an interesting vid shows people dealing with it quite good to show the amount of smoke produced and time taken to deal with it.