Gollum--
I Googled "space heaters house fires" and found:
http://www.google.com/search?hl=en&q=House+fires+space+heaters
People will put space heaters next to flammable material. This is not a good idea.
My impression is that a space heater plugged into old or inadquate wiring may be fine for the first hour or the first three hours or the first twelve hours, but eventually the old/inadequate wire heats to the point of combustion.
Have you seen the way some people use extension cords? Or saw off the third prong of a heavy duty appliance so that it can be plugged into a convenient socket?
I'd guess that all space heaters are inspected before they leave the factory. All buyers of space heaters are not inspected before they leave the store.