There is a hot air balloon festival coming up in my state. As part of learning photography, I plan to go and capture some nice shots during the event. I currently have Canon Digital Rebel Xsi with kit lens, but I'm wondering if there is any better lens which I should use to capture the event. I'm planning to rent the lens rather than buying.
Ballooning is a bit of an odd duck, in that you can use just about any lens from a circular fisheye to an extreme telephoto to capture compelling images. They are bigger—much bigger—than most people think they are, so there's a lot of room for wide and ultra-wide angle shots before and during takeoff. For several minutes afterwards, a wide-to-normal lens will fit in quite a bit of the action, and a short tele (that's the long end of your range with a kit lens on an APS-C) can capture individual balloons or small formations for quite some time, and long teles can get really interesting overlapping shapes at a great distance.
While your kit lens may not be the best bit of glass ever made, you could come away from the festival having used nothing but without being too disappointed, except at the wide end. You might want to look at something like the EF-S 10-22mm/3.5-4.5 USM to give you a lot more bang at the wide end—balloons look spectacular when you can get close with a really wide-angle lens and just let their vastness (and bright colors, of course) take over.
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What Stan said - wide angle is extremely useful and desirable.
You can use panorama stitching software to give "ultrawide angle" effects of sorts that can be rewarding.
If available the longest lens possible can be useful once they get going. At a festival balloons will often associate in groups which vary dynamically and pass low over the landscape initially so you get very nice mixes of tress balloons buildings etc at some distance from the launch site. Being able to "reach out" to these is useful This ability is probably secondary to being able to take good closeup shots, but as the majority that you will see are closer shots, if you can get good distance shots they will be less usual. Very distant shots are common but become more like landscapes than balloon specific photos.
Less usual - IN balloon envelope photos:
Balloons have a large upper rip panel and this allows crew access during inflation and a camera view. Obviously you do not tinker with the sealing and are guided by the crew member BUT it is very possible to photograph from the "top" out through the opening with the flames curling towards you. Seems safe enough :-). Wide angle or stitched panorama is rewarding here. Fisheye too probably but I've not tried that.
Inside looking out - you can get MUCH more impressive ones than this with relative ease: From here You camn see that a wider lens would have been 'useful'
As a balloon starts to finally leave is a good moment - airborne, trail rope on ground, passengers looking down on you, canopy full, burner on full, nice and close. Wide angle good. 18mm on APSC bearable but wider better.
Some festivals have fly-ins where contestants go to fields of choice around an area and attempt to home on a target. In such cases there will be onvious best directions die to wind and local conditions and crews will drive around looking for best venue. Suddenly you can have a smallish fsield with maybe 10 or 20 crews madly setting up and launching in parallle with action all over. Much less controlled than at central venue, no real crowd controls. The rules then are "if you don't get in their way and don't do anything silly enough to get noticed you can more or less wander among the balloons at will." That may vary where you are but I'm in New Zealand and our "safety and health" people are usually as tough as most places - how that transfers to NJ I don't know.
Many examples - Have a look at photos like these - decide which ones you like most and what lens and camera position you would need to match them.