Taal volcano is not your regular volcano, but a so-called complex volcano which is basically a volcano with more than one feature. In case of Taal it has multiple stratovolcanoes and calderas, cinder cones, tuff rings, scoria cones and activity varying from caldera-forming to pyroclastic flows. This makes Taal volcano one of the most active volcanoes of the Philippines. All historic eruptions have occurred on Taal Island and have changed the appearance of the volcanic complex on multiple occasions. For instance the 1965 eruptions (the 60s had a total of 5 eruptions) created a new island as well as causing a tsunami, pyroclastic flows and eruptions in the craterlake. The island itself is build up from at least 46 overlapping cones, craters and maars.
A mere 50km from Manila, the capital of the Philippines, an eruption at Taal can be disastrous, having killed at least 5000-6000 people in the past. The violent eruptions that formed the calderas at Taal volcano are comparable to those that formed Lake Toba in Indonesia. Due to its dangerous nature Taal is one of 16 Decade volcanoes monitored to prevent major hazard by the IAVCEI (International Association of Volcanology and Chemistry of the Earth’s interior. You can find an overview of the 16 Decade volcanoes here: http://vulcan.wr.usgs.gov/
The last major eruption was in 1977; however there have been intermittent tremors since 1991 accompanied by ground fracturing, earthquake swarms and increase of water temperature of the lake. The last of these unrests was during 2008-2010. Permanent settlement of the island is prohibited by the Philippines institute of Volcanology and Seismology. However, poor families have settled the island because of its fertile volcanic soil.
Now at last, just for facts about islands and lakes. The largest lake on an island is Nettilling Lake on Baffin Island (Canada). The largest island in a lake is Manitoulin Lake in Lake Huron (Canada). The largest island in a lake on an island is Pulau Samosir in Lake Danau Toba on the Island of Sumatra. And the largest lake on an island in a lake on an island? Well, you know that now..
Image: http://bit.ly/YUvovK. Taal crater Lake with Vulcan Point Island in the north.