There are a large number of licence exempt radio communication modules available (e.g. see link) - however there are only 3 types that may be used for air to ground communication (see link) - these are:
Modules must conform to EN 300 220
And as of September 08 - 500mw on 869.40- 869.65 MHz < 10% duty cycle
Given the very low powers (10mW is about the power used by a dim LED)- its going to take some doing to use these in balloon to ground communication - but it can be done - over 400Km has been achieved.
Below is an example of a 10mW NBFM (Narrowband FM) transmitter module for use at 434.650MHz.
The Radiometrix NTX2 is the module of choice for UK HABing.