I've never done the plastic jug thing, so I don't know how that would work. But I HAVE (very often) used an empty Carlo Rossi 4L glass jug and bought a #6 bung and an airlock. Works great- that's how I make my famous Welch's grape juice wine. The airlock is $.79, so no way would I go to a balloon system to save a dollar. Even though you're making cheap wine, you're making it to drink. The balloons can pop (even with a pinhole) or allow in oxygen. An airlock is cheap insurance. I also use the large wine bottles (1.75L) with stoppers that fit and airlocks, too. I don't remember what size the bung should be for those bottles, but it's obvious when you're at the LHBS because they are the smallest ones. The #6 ones for the 1 gallon jugs are easy to find.
I've had a few friends collect those jugs, drank one myself, and also got some from the recycling center. Well, ok, I was dumpster diving, but it sounds better to say I acquired them from the recycling center.