Despite the fact that this is absolutely my area of research (I study isotope for medical purposes - physics remains the same), I've heard almost nothing about this! :s
Rest assured though that it's not going to be a 'mini-chernobyl.' This is going to involve harnessing the decay energy from bismuth-212 and using that to power a device. Quite how, I honestly don't know.
In order to turn it into a nuclear bomb, you'd need material that was fissionable and someway of getting it to achieve critical mass (usually a ball of C4 surrounding the fissionable core.) No device as small as a watch could be turned into a weapon that could 'blow half a city up.' Sufficient energy just isn't there in the material!
Edit: Further poking around on the internet indicates that a 'nuclear battery' would run of the nuclear decay of a long-lived excited state of Bi-212 which the hope to somehow force to release its energy on cue.
In short, nothing to do with nuclear fission. Nothing to do with nuclear bombs!
So let's stop the unnecessary fear mongering before it really gets going and admire the coolness of technology, k?