The heat issue is a bit bigger than you think. I got the same problem with a pair (and another) of rechargeable AA batteries, used for a while, but still normal - in other applications. But here I got Mintyboost V3 chip temperature rising immediately after plugging the phone (HTC Desire) in on one pair and after half a minute on another pair of rechargeables. One pair got the chip temperature up to 98 degrees Celsius with unpleasant hissing noise, then my conscience stopped this madness. Other pair got up to some 70 degrees Celsius. That is definately too much, there is no way you can make me believe the wet finger test is good enough. Chip datasheet says it can work up to 70 degrees Celsius. So that is not good, what I have there. Batteries got only slightly warm, no more than body temperature.
Then I started to look at the datasheet. I am no expert in all this stuff, but what catched my eye, was the mode change feature of the LT1302 chip - current vs burst mode. I guess what we have here is mode hopping occurring, when the supply voltage gets dragged down by the load. And that also makes the chip very ineffective.
I did not have any such problems with LiPo battery, where voltage did not drop, but was slowly declining at the same time as the phone battery was filled up - like in some half an hour maybe 0.4V difference, not like AAs - 10 seconds and 1.75V from two batteries.