When air heats, it thins out and therefore weighs less. So, when you put a lot of hot air free floating in the midst of heavier cold air, it creates a slight upward pressure. Things that are lighter than the surrounding air go up and things that are heavier, move down.
Since the pressure difference is so slight and they're steered by the direction of the wind, it takes a lot of hot air to move any significant weight and the operator doesn't have much control over where it goes. That's why the balloons are so large and nobody uses them to drive to work. :-)
Answered Oct 15, 2012
Edited Oct 15, 2012