While I always presumed that NiMH batteries were superior to NiCd ones in charge and discharge properties (less memory effect, higher power densities and higher currents) I think the main reason people are switching is because of the extreme toxicity of Cd. It is contained, true, but people don't always properly dispose of these batteries.
Which brings up an interesting question: many industries today obtain Cd as a highly undesired by-product. Especially fertilizer plants produce quite a lot of it. There is no way to get rid of it: everything containing Cd has been slowly converting to other chemicals. So it makes me wonder a little what they are doing with the metal these days.
