About a year ago I rebuilt several power tool battery packs with new Sub-C NiCd cells I bought online. For the last year they have worked great. My Dad has used several on a regular basis and he said they have better capacity than the original cells and a year later they are still going strong.
Except for one that quit rather suddenly a while back. It was working normally, and he put the cordless drill down and not long after smelled something burning. He ran around and checked a bunch of stuff and found that the battery pack on the cordless drill was very hot. The cells had overheated, melted the case a bit, and then failed.
I opened the pack up to find that four of the cells in the pack were damaged. They measured zero volts, and one was burned on the ends. Inspecting the cells showed that the thin heat shrink covering on the cells that were damaged had split. But that was just a symptom of the cells overheating, not the cause. I found a spot on two cells that had rubbed together, causing four cells to short circuit through the case of a fifth cell.
Watch the video to see the damage and my discussion of how possibly to prevent the issue from occurring again.