I've not really messed around with character sprites and what have you, so you may want to wait for a more accurate/detailed answer from someone else, but isn't that exactly what the fishing rods and bicycle do? They have their own spritesheets, iirc, and so whatever code handles using those items (and I wouldn't know where that is off the top of my head) should also change the player's sprite to use the appropriate sheet. Have you tried looking at and copying/modifying those?
If you want this "balloon" item to do something that isn't comparable to the bike/rods, it'd probably help if you gave a little bit more detail about what you were trying to accomplish.