I have been using my dad's old Metz mecablitz 18 B1 flash for a while with my Canon 7D and had no trouble with it, but just received some advice from a friend that using old flashes can fry the camera. Is this true? And if so, is there a safe way to use it (I'm trying to avoid having to buy a new flash – but also would like not to destroy my camera). The flash takes 3 x AA batteries and has a single hotshoe connection.
Yes the trigger voltage on some old flashes is too high for modern electronic cameras.
There is a page on botzilla Photo Strobe Trigger Voltages which lists many old flash units. I don't see your dad's flash model there, but the 20 B3 model had a trigger voltage of 168 volts.
According to this thread on photo.net, the 7D can handle up to 250V, so that flash may be safe with your camera, even if it does have a high voltage like the B3 model
There is further information on dpanswers on safe voltages for Canon and Nikon, and also how to measure the trigger voltage of a flash.
You can also grab one of these High Voltage Sync Regulators just to be safe:
I think there is also cheaper models as well. Either way they're a lot cheaper than rewiring a camera.