The file is a mess.
Baking is not included in the file, nor is the video (which you can’t pack). Have to disable disk caches but doing so doesn’t make it clear what you are trying to do. Everything is out of scale even though you’re working with distances of hundred meters or a couple of kilometers max. Viewport clipping distance is maxed out.
Emitter object is 15 kilometers long and over 7 kilometers wide because the scale is so big (and unapplied). I doubt you want to emit balloons from so large area. The actual emitter dimensions are 2x2x2 meters (plane primitive). Camera has a scale of 0x0x0 so that one can’t see it in the viewport (doesn’t affect rendering).
Balloons have one location keyframe and rigid body physics. No idea why.
Cycles materials are not compatible with Blender internal render. That is probably why you don’t see anything when switching to BI. Would have to include a node tree for BI alongside with Cycles material nodes, or use another scene.
It’s not clear what is going on with render layers. You have two of them but they don’t separate anything since they are the same.
You can apply object scale with Ctrl+A -> scale so that the scale is transferred to actual dimensions and are what you see in the viewport. Alt+S to clear the scale (alt+G to clear location, Alt+R to clear rotation).
Rigid body tools are on the tool shelf (T) but if you want to use hotkeys, Ctrl+R to add active RB, Ctrl+shift+R to add passive RB, Ctrl+alt+R to remove RB physics.
To render with BI, I would probably make a copy of the scene (top header), remove Cycles materials and add materials for BI. But it’s possible to have both in one object http://www.pasteall.org/pic/show.php?id=57064
That way Blender chooses node tree depending on which render engine is active.