Why did it catch on fire?

It may be the oil in the popcorn---do you own one of the covers that go inside to cover so food does not splatter?

I have never seen a microwave that doesn't burn popcorn if you use the "popcorn" button. Why the manufacturers keep putting them on I'll never understand. There's nothing you can do change the presets on an oven since they are built into the controller. Instead of relying on the oven, you should follw the directions on the bag. These tell you to use high power, stay by the oven and stop the cooking when the time between pops drops to 1 or 2 seconds. Stored heat will continue to pop kernels for a bit, and you won't cremate your popcorn. You'll also avoid the possibility of the bag catching fire and damaging the oven, which I have seen several times. Finally, don't expect 100% of the kernels to pop. There wil always be a few duds, and extending the cooking time just results in burned popcorn.

The microwave oven is not safe to use, the fire has compromised the interior of the oven, if you run the microwave it will start to arc and eventually short out the magnetron, because the white enamel paint has been burned away. If you have holes in the ceiling there is danger of radiation leakage, for safety reasons the oven should be replaced.

It may have dried out from over cooking.

This is common in potatoes, popcorn, and other low-moisture foods.

The manual will tell you about that, and it will also tell you not to leave a microwave unattended while it's running.

all microwaves have flame sensors that will cut the power in case of fire, this sensor will most likely have to be replaced. this will require you to drop the m/w and remove the case.

Why is this even a question?

Of course a paper towel can get hot enough to catch fire in a microwave. In addition, anything not specifically identified as microwave safe can melt, deform, crack, chip, spark, catch fire, explode, etc...
This is not a microwave problem.

it may be ok , but it should be checked for internal damage

You don't say which make/model microwave you have, but on every model I have ever seen the thing that sits behind the plastic cover is the magnetron - the bit that actually generates the microwaves.

Unless the microwave was a fairly top-end model, you might well be cheaper to just buy a new one.

Hope this helps,

Matt

I have contacted the manufacturer, Salton, Inc to complete the warranty. Thank you for the quick response.

It's not a dangerous or diffcult job for a do-it-yourselfer.

That would be the waveguide cover (also called the stirrer fan cover), and it would need to be replaced to prevent future damage to the magnetron.

Check your model number sticker to get the full model number with suffix and the manufacturer number (PACO1860AB0 for example).

Then you can find helpful exploded view diagrams and order parts by entering your full model number here: http://tinyurl.com/gv383

Good luck and good cooking!

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