When hitting mobs with a fire aspect enchanted sword, the mobs aren't catching fire. Friendly mobs such as cows, chickens, and pigs are still dropping cooked food however.
This has been occurring on the SMP server I play on, so I haven't tested if it happens in single player or not.
22nd Duplicate of MC-29748, please use the search function to see if your bug has already been submitted. Currently over 47% of tickets are being resolved as duplicate.