After the initial production of HI, the condenser should be able to condense all the vapor from the reaction and return it to the flask. During the initial stage of the reaction where the HI is being produced, you will exceed the capacity of most condensers; I suppose you could use larger condensers, colder coolant, or a more efficient condenser; or you could use a balloon during this stage of the process.
AFter the initial HI production, and in particular if you let the wet mixture cool, the water will absorb almost all the HI (at least if you have enough water in the reaction). From that point forward, the balloon is not necessary. A little cotton in the top will help keep the odor from escaping, and is all that is really needed.
I have done refluxes with and without the balloon after the HI production phase is over, and I tend to leave the balloon on, since it does provide some odor control. Removal of the balloon has not, in my experience, changed the final product or the yield in any way.