Ballooning is a bit of an odd duck, in that you can use just about any lens from a circular fisheye to an extreme telephoto to capture compelling images. They are bigger—much bigger—than most people think they are, so there's a lot of room for wide and ultra-wide angle shots before and during takeoff. For several minutes afterwards, a wide-to-normal lens will fit in quite a bit of the action, and a short tele (that's the long end of your range with a kit lens on an APS-C) can capture individual balloons or small formations for quite some time, and long teles can get really interesting overlapping shapes at a great distance.

While your kit lens may not be the best bit of glass ever made, you could come away from the festival having used nothing but without being too disappointed, except at the wide end. You might want to look at something like the EF-S 10-22mm/3.5-4.5 USM to give you a lot more bang at the wide end—balloons look spectacular when you can get close with a really wide-angle lens and just let their vastness (and bright colors, of course) take over.