From The American Academy of Pediatrics:
Do not feed children younger than 4 years round, firm food unless it is chopped completely. Round, firm foods are common choking dangers. When infants and young children do not grind or chew their food well, they may try to swallow it whole. The following foods can be choking hazards:

Hot dogs
Nuts and seeds
Chunks of meat or cheese
Whole grapes
Hard, gooey, or sticky candy
Popcorn
Chunks of peanut butter
Raw vegetables
Fruit chunks, such as apple chunks
Chewing gum

Statistics:
Injury and death rates

The majority (80 percent) of children who died from airway obstruction injuries in 1999 were children ages 4 and under.

A total of 776 children ages 14 and under died in 1999 from airway obstructions:

More than 569 children died from suffocation, strangulation, and entrapment (in household appliances and toy chests).

Almost 197 children died from choking (food and nonfood).

In 2000, sixchildren, ages 4 and under, died from choking on a toy or toy parts (half of which were balloons). In addition, three childes died from toy-related suffocation.

On average, 5,000 children, ages 14 and under, are treated in hospital emergency rooms for airway obstruction due to toys and toy parts annually. The majority of these children (75 percent) are ages 4 and under.

Where and when

Most airway obstructions in children occur at home.
Suffocation is more common in the summer, while choking is more common in the winter.
Children most often choke on food items.
Balloons are the most common cause of toy-related choking death among children of all ages.
The majority of infant suffocation tends to occur where they sleep (60 percent).
Strangulation by window blind or drapery cords most often occurs when the cord hangs near the floor or crib. The majority of children who strangle by window covering cords are ages 3 or under.
More than half of drawstring strangulations (i.e., on the hood or neck of a jacket) occur when they become entangled on playground slides.
Since 1990, at least 57 children have died because they became entrapped in bunk beds.

Opinion: First, the child described was four, so eating grapes should have been OK. Second, the inflated balloon is not dangerous–what is dangerous is the kids chewing on the deflated balloon. Playing with a balloon on a playground is OK, but maybe not taking it up to the child’s room later.