An interesting update.

I've spoken with Red Scholefield, the author of the rcbatteryclinic site. I've asked him the famous question about shorts and the dual batt & switch setup...

He told me that the setup is designed to work against OPEN circuits, i.e. a failure of switch & harness between the batteries and the receiver. It is not designed to work with shorts...

But here is the good news: he says that shorts RARELY occur in a charged cell, simply because a charged will "zap" itself, blowing away any short. That is the reason why he says that shorts can be detected before flying with a volt meter. The worst case is that a cell with a developing short will exhibit a greater self discharge, but that again can be detected with a meter, before every flight. Summarizing, he told me that we should not worry about shorts.

For more info, read the short section on his site, it is very informative.