Chip pan fires reportedly are the most common cause of house fires in the UK. A chip pan is a deep metal pan filled with oil used to fry chips (french fries). A fire can start if the oil gets too hot and ignites. Overfilling the pan or adding wet chips can cause oil to overflow the pan and catch fire, too. If you add water or wet chips to the pan, the water sinks to the bottom of the pan. The bottom of the pan is hot, so the water vaporizes. The water vapor expands, forcing the oil out of the pan (which can splash you with hot oil even if it doesn't cause a fire).
Back to that photograph... If you feel like setting your own lab on fire by trying the simulation, here's how to set it up. You fill a metal beaker with wax, heat it over a Bunsen burner until it catches fire, then add a little water to the beaker (presumably from a distance). This also goes to show, dramatically, why you don't want to try to put out a grease fire with water.
State of Matter of Fire | Less-Dangerous Fire Projects