It's "douchenator." I'd check out the
full article if you're interested in learning more about it. If you get confused by any acronyms or terminology, check the link in my signature.
The water balloon launcher is pretty simple. You fill the PC with air, stick in a sabot for wadding and a water balloon, and open the ball valve. The air rushes down the barrel and pushes the projectile out.
The problem is with the efficiency. Ball valves open fairly slowly, so the water balloon is out of the barrel long before the ball valve is completely open and before any real power can be generated.
Look into using sprinkler valves, piston valve, pull valves, etc. if you're interested in more efficient trigger valve systems. Potato cannon websites like
SpudFiles offer far more information on these pneumatic systems. People like joannaardway here at SSC are active on spud forums too, so they know a good deal of information.
Check out the
battle-practical water balloon launchers thread at WWc to look at some things people are considering to improve water balloon launchers. water balloon launchers are really just pneumatic spud guns that require less range and that need to be battle-practical - higher rate of fire, smaller size, etc.
EDIT: Looking at Drenchenator's post below, I guess I missed all the important stuff. As he says, the Douchenator is easy to build and gets the job done.