Updated March 16, 2012.
When parents thing about toy safety and young children, they mostly think about choking hazards from balls, marbles, and small toy parts.
Surprisingly, balloons cause more choking deaths than balls, marbles, or toy parts.

In addition to choking or aspirating on broken balloon pieces, some children suck in uninflated balloons while trying to blow them up.

Part of the reason that so many children choke on balloons may be that parents underestimate the choking hazard from balloons, especially to older children.

Although most toys with small parts are labeled as being a choking hazard to children under age 3 if they have small parts, it is important to remember the warning label that should be present on balloon packages:

CHOKING HAZARD â?? Children under 8 yrs can choke or suffocate on uninflated or broken balloons. Adult supervision required. Keep uninflated balloons from children. Discard broken balloons at once.

References:
¹21st annual Trouble in Toyland report. Attachment B. Toy Related Deaths, 1990-2005. Public Interest Research Group