A conventional hot air balloon burner is just a big flame burning up into the interior of the envelope.
There are, however, some disadvantages to this. The combustion is not that efficient, and one of the combustion products - water - is a liquid at ambient temperatures; as it cools, its volume decreases by orders of magnitude, and as the flight progresses, the envelope is pretty much full of just combustion products.
The answer to this is the new BorgCo Gas condensing high bypass hot air balloon burner. Borrowing technology from domestic hot water/heating systems, the enclosed burner (the enclosure being built of lightweight aerospace-grade materials such as ceramics) heats a separate airstream, driven by a minature gas turbine operating in a venturi tube, which passes through a jacket around the burner to the desired temperature, and cools the exhaust gases to the point that water vapour condenses out. The remaining warm air is also piped into the envelope, and the condensate (actually a strong solution of nitric acid) is simply allowed to dribble out randomly on whatver's under the basket at that moment.-- 8th of 7, Jun 24 2010 bun for dripping acid-- Voice, Jun 24 2010 We thought you would appreciate that.-- 8th of 7, Jun 24 2010 [+] on its own merits. I have one quibble, though: What's with the "random" nitric acid dripping? It's unlike you to omit an aiming mechanism.-- mouseposture, Jun 24 2010 Even from the modest altitudes at which balloons operate, any sort of aiming of a liquid jet is a practical impossibility due to the effects of air currents.
It would be possible to collect condensate in thin plastic bags for subsequent release on an appropriate target, but aiming would be challenging. Using 2 litre soft drink bottles equipped with fins (like a "water rocket") would be a more promising approach.-- 8th of 7, Jun 25 2010 A two liter bottle is quite strong (could be dropped without breaking) and the plastic would be melted by the acid. Recommend a glass bottle of the same shape instead.-- Voice, Jun 25 2010 "Hey, just what you see pal."-- 8th of 7, Jun 25 2010 random, halfbakery