From the Super Mario Wiki
Balloon Racing is a 1-to-4 player Action Minigame in New Super Mario Bros. The player must blow into the Nintendo DS mic to make Yoshi float with his balloons and get to the top. As an obstacle there are many Fly Guys moving horizontally to stop Yoshi's ascension. If Yoshi is hit by a Fly Guy, one of his balloons will pop, if both balloons are popped, Yoshi falls back to the ground, and ends the game in a Game Over. The goal of the game is to reach the top in the shortest time possible. disqualifies him from the competition.
In multi-player, the goal of the game is to reach the top first before the player's opponents. Losing all balloons results in disqualification from the contest.
 In-game instructions
Blow into the Mic to send Yoshi flying skyward. Yoshi's balloons will burst if he hits a Fly Guy. If all the balloons pop, Yoshi will fall. Can you reach the goal before time runs out?