Sorry for late answer. I found a couple of .reg files that do the job of enabling and disabling balloons. As I said, the policy editor alone did not work, but applying this regs work fine.
Did not find how to attach files to this post so here are the text for both .reg files, justcopy to a text file and save as .reg file:
Enableballoons.reg
--------------------
Windows Registry Editor Version 5.00
[HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Policies\Explorer]
"TaskbarNoNotification"=-
[HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\Policies\Explorer]
"TaskbarNoNotification"=-
[HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Explorer\Advanced]
"EnableBalloonTips"=-
[HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\Explorer\Advanced]
"EnableBalloonTips"=-
DisableBalloons.reg
--------------------
Windows Registry Editor Version 5.00
[HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Policies\Explorer]
"TaskbarNoNotification"=dword:00000001
[HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\Policies\Explorer]
"TaskbarNoNotification"=-
[HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Explorer\Advanced]
"EnableBalloonTips"=-
[HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\Explorer\Advanced]
"EnableBalloonTips"=-