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Napalm is gasoline mixed with a gelling compound that was used as a weapon by the American forces during the Vietnam war. When it was dropped it would burn and stick to people's skin and cause horrific injuries and death. I was going to post a link from youtube but it was absolutely horrific, worse than horrific, so I have decided not to. I couldn't even watch it myself.
Silly putty is this stuff, apparently it was originally invented during attempts to create a synthetic rubber during WWII:
http://en.wikipedia.org/wiki/Silly_Putty
There isn't really any connection between the two.