Arnold,
I have been using Lipo batteries for years now in R/C EDF Jets and can tell you that you that they are that bad, even worse than Li-ons, and I would not recommend using them in Rocketry. Li-ons would actually be a safer alternative as they are packaged in a hard case and have a lower power C rating, thus less energy, while Lipos are always manufactured in soft aluminum wrappers ( good way to identify them), which make them more susceptible to damage from dropping, hard strikes and puncturing. Additionally, Lipos usually hold and can discharge at much higher power ratings, hence they are more volatile than Li-ons. Moreover, they do explode and burn with a flame usually much more intense than the Li-ons.
In the case of using them for powering rocketry components, I would not consider them safe to fly. With their capacity they can easily supply power to our devices, however, they are not what I would consider safe as we have overlooked a serious potential problem. Most of us like to avoid talking about the problem launch or core sample and this would be a big negative downfall for Lipos. You would have a very high chance of puncturing the pack, which would react to the atmosphere and catch fire. Additionally, this would most likely happen inside the frame of a paper or phenolic model, litterally adding more fuel to the fire. Moreover, the chance of this causing a fire at a launch site would be very high, especially when it usually includes an abundance of fuel called a flying field. For these reasons and more, it would not be wise to use Lipo batteries in your model when there are better, safer choices currently available.
When preparing for a launch, we should all consider safety first, as our models can have a considerable amount of energy behind them. Eliminating potential hazards is part of this safety mindset and should include the form of power we supply to our electronics, to include batteries. For this reason, I would not recommend Lipo batteries for use in our models.
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