I've just come off BA294 from O'Hare which had come via Houston. Flew with 5 American guys who were on the Houston flight which had the engine fire. From their description I would say this was a pretty major incident - they could see flames from the engine, there was dense smoke in the passenger cabin,
Sounds like it could have been a compressor failure where the fire stays in the tailpipe and the smoke in the cabin (from the compressor) lasts until the bleeds are closed.