GlueGlitter or Glitter Glue
Blow up the balloons into a small round shape (grapefruit size perhaps). Dip yarn into glue (use a disposable cup, can, etc. so that you can toss after you're done). Remove yarn from glue squeezing some of the excess glue from it. Wrap yarn around and around and around the balloon in multiple directions. Wrap the ends under other strings. Sprinkle with glitter (or wait until dry and then decorate with glitter glue and then allow to dry again. Put somewhere warm to dry.
*tips* i did this craft over a piece of cling wrap (could also use wax paper or aluminum foil) for easy clean up. I used a ice cream pail lid for the balls to dry on.
Once dry, (you may need to turn occasionally as it drys) pop the balloon and remove. Tie a ribbon and hang on the tree.