The following is written as information only. The following in no way constitutes any form of accurate legal advice. If you choose to use Hydrogen the onus is on you to research the implications and take appropriate safety measures both for yourself personally and the general public.

Paragraphs quoted from external sources have references next to them.

Hydrogen is an attractive gas to use for high altitude ballooning due to its high lift and low cost.

Hydrogen has been feared in the popular press as a relatively more dangerous fuel, and hydrogen in fact has the widest explosive/ignition mix range with air of all the gases except acetylene. However this can be mitigated by the fact that hydrogen rapidly rises and disperses before ignition. Unless the escape is in an enclosed, unventilated area, it is unlikely to be serious. Hydrogen also usually rapidly escapes after containment breach. Additionally, hydrogen flames are difficult to see, so may be difficult to fight.(i)

Hydrogen is highly combustible and can auto ignite with a low ignition energy. For this reason hydrogen cylinders must not be snifted, that is opening the valve momentarily to release small volumes of gas to clear dust from the valve neck, as hydrogen will spontaneously ignite upon release and will burn with an invisible flame.(ii)

An example of what a balloon filled with hydrogen does when ignited is shown in this video: http://www.youtube.com/watch?v=cQvpK9cl0No - in short - a bonfire the diameter of the balloon, and flaming bits of balloon thrown around.

Due to this, though this is unlikely, clothing and face protection suitable to resist flaming fragments, and a suitable extinguisher should be at hand.

An actual explosion is hard to achieve, though will be much more damaging. Avoid having any significant quantity of air in the balloon before filling, to ensure that there is never a possibility of an explosive mixture forming in the balloon.

Obvious safety precautions should be adhere to when dealing with Hydrogen :

1. No smoking or sources of ignition in vicinity (iii)
2. In confined environments where the Hydrogen can't escape it is an asphyxiant (iii)
3. Excess gas should not be vented off without suitable burner equipment and flash back arrestors.(iii)
4. Take precautionary measures against static discharges (iii)
5. Have a fire extinguisher handy. This should be dry powder, water or foam. CO2 types are not recommended.
6. You will always need a regulator for a hydrogen tank, to drop the pressure to a suitable level.

Additional precautions regarding balloon use :

1. The vehicle transporting the cylinder should have a Flammable gas warning sign on it. Check if this is legal requirement in your country.
2. Balloons should carry a warning placard on or near the neck advising the balloon contains flammable hydrogen no smoking or open flames and should it be found with the balloon still inflated a contact number should be provided.
3. Check the balloon neck very carefully for damage due to tying off. Slow leaks constitute a significant concern for Hydrogen flights as they could result in the balloon coming down still inflated.
4. Fill it enough to ensure a burst. Even with a Hwoyee.
5. Use eye protection.

References :

(i) http://en.wikipedia.org/wiki/Hydrogen_safety
(ii) http://www.boconline.co.uk/products/products_by_type/industrial_gases/fuel_gases/hydrogen.asp
(iii) http://www.bocsds.com/uk/sds/special/hydrogen.pdf