It doesn't just deteriorate, it explodes.
Nitrocellulose was used as the first flexible film base, beginning with Eastman Kodak products in August, 1889. Camphor is used as a plasticizer for nitrocellulose film, often called nitrate film. It was used until 1933 for X-ray films (where its flammability hazard was most acute) and for motion picture film until 1951. It was replaced by safety film with an acetate base.
The use of nitrocellulose film for motion pictures led to the requirement for fireproof projection rooms with wall coverings made of asbestos. The US Navy shot a training film for projectionists that included footage of a controlled ignition of a reel of nitrate film, which continued to burn when fully submerged in water. Unlike many other flammable materials, nitrocellulose does not need air to keep burning as the reaction produces oxygen. Once burning, it is extremely difficult to extinguish. Immersing burning film in water may not extinguish it, and could actually increase the amount of smoke produced. Owing to public safety precautions, the London Underground forbade transport of movies on its system until well past the introduction of safety film.
Cinema fires caused by ignition of nitrocellulose film stock were the cause of the 1926 Dromcolliher cinema tragedy in County Limerick in which 48 people died and the 1929 Glen Cinema Disaster in Paisley, Scotland which killed 69 children. Today, nitrate film projection is normally highly regulated and requires extensive precautionary measures including extra projectionist health and safety training. Projectors certified to run nitrate films have many precautions, among them the chambering of the feed and takeup reels in thick metal covers with small slits to allow the film to run through. The projector is modified to accommodate several fire extinguishers with nozzles aimed at the film gate. The extinguishers automatically trigger if a piece of flammable fabric placed near the gate starts to burn. While this triggering would likely damage or destroy a significant portion of the projection components, it would prevent a fire which could cause far greater damage. Projection rooms may be required to have automatic metal covers for the projection windows, preventing the spread of fire to the auditorium.
MoMA Film Preservation Center: Tour: http://www.youtube.com/watch?v=Yh48p5efBTk