It sounds like this might be best approximated by circle-circle collision.
Store the balloons in terms of a center point and a radius (of a circle which closely matches the balloon art). Given this, collision checking is simple! Remember your pythagorean theorem. If one balloon is at (x1,y1) with radius r1 and the other is at (x2, y2) with radius r2, then:
if((x2-x1)^2 + (y2-y1)^2 < (r1+r2)^2) {
// collision
}
So basically, the distance between them is sqrt((x2-x1)^2 + (y2-y1)^2) and the collision distance is r1+r2. Since sqrt is an expensive operation, square both of those to get rid of the square root, and you're left with the code I wrote above.