Canon A640 overheating and catching fire

I believe that the problem stems from possible contact between the metal wire of the hinge spring and the battery contacts. The overheating, and subsequent melting, charring, and burning would originate in this location. However, from the OP's picture, it appears that the overheating took place with the batteries on the outside of the enclosure, or away from the hinge. The batteries closest to the hinge look fine, and undamaged......

A fully charged NiMH AA battery can supply enough amperage to cause the kind of overheating seen in the picture. The spring on the A640 door is different than the A530-540 and looks to be correctly bent into the hole provided.

What appears to have happened is a direct short of one or more batteries, either by the battery case or by a defect in the camera electronics. In looking at the picture, it appears that the battery to the left has a bare spot at the outer edge. If that is indeed true, and if the negative shell of the battery extends up that far, then the battery contact would have shorted that cell.

In any event, Canon should have insisted that you return the defective camera directly to the factory for inspection by their engineers to determine the exact cause of the overheating. To simply ask you to return the camera to your dealer for a replacement adds the dealer into the mix. If the dealer doesn't send the camera back, or messes with it, then Canon loses the opportunity to inspect the evidence. There could have been a manufacturing defect with the battery contacts and early detection could save them a lot of grief. You should contact Canon again and ask to speak to a manager and give them one more opportunity to get the camera back for inspection. However, unless they authorize an immediate replacement from your dealer, you may get stuck without a camera until they send you a new one.

oh no....sounds bad and looks bad....i just bought my A640....it better behave and be good...

We have sold thousands of the Canon Powershot models and I have never heard of anything like this happening. I would definitely work through your dealer to make sure this is brought to Canon's attention and have the camera replaced.