The Water Balloon feature has been here since the game's start in May 2008. It allows players to throw a water balloon at another part of the room, usually at a person.
It is simple to use, actually. In modern YoWorld, you click to open the chat bar, then click on actions and it will be at the top of the actions menu for you to click on. In old YoWorld, the water balloon had its own special button.
Once a balloon is thrown, you must wait for it to refill. This usually takes a few minutes for this to happen. But if you go into water e.g. the beach, the balloons will refill much quicker and you can throw more.
In Winter 2008 the water balloons were replaced with Snowballs, but returned in Spring 2009.
Computer vandals were able to exploit the water balloons feature by editing the game's code to allow them to throw unlimited balloons. This action usually caused other players to lag and even freeze, though a browser refresh often fixed this.