I quickly took the thing outside and removed the cell pack. I put it on the patio and it continued to smoke. After a while, I severed the connection between the cells to cut off any short circuits which may have been occurring.
I've never heard of a NiCD exploding unless it was drastically overcharged. I was using the proper wall charger. This was quite disturbing! I've just read that cadnium can be toxic so I've cleaned up all the residue, removed the trash from the house and washed my hands and the battery pack shell really well.
I'm now going to be paranoid of all NiCDs I have in the house!
Here's the destruction. The explosions were powerful enough to do the damage you see, when I severed the cells apart all I did was break the electrical connection, nothing more.

