Balanced

Balanced is a commonly-used PvP term that may refer to one of two things:

Party composition ("balanced" build)
A balanced party will usually include:
 * 2-3 "frontliners" (Warriors or Dervishes)
 * 2-3 midliners (Mesmers, Elementalists, Necromancers, Paragons, or Ritualists)
 * 2 backliners (Monks or other healers)
 * 1 support (usually flag runner for GvG)

What isn't balanced?
Players that attempt to exploit game mechanics and skills/builds to win (instead of relying on pure skill) run builds called gimmicks. Gimmicks come in all shapes and sizes; basically, if a build is not "balanced," it is most likely a gimmick.
 * Pure spike teams (as opposed to balanced teams with a spike) are one example of a gimmick; they usually pose no pressure threat, but can deal enough damage to a single target to kill it in under a second. Ranger spike, Blood spike, Air spike, and Rit spike are all examples of gimmicky spike builds.
 * Builds that are composed of many characters of the same profession (5-8 paragons, 8 necromancers, 8 elementalists, etc) are also gimmicks. These usually rely on exploiting or abusing the primary attribute of their chosen profession to provide enough energy to outlast the other team (either by spiking, in the case of a full necromancer party, or by general invincibility, in the case of 8 paragons).
 * Builds that rely on hero AI are, indeed, gimmicks. Whether it be timing Discord perfectly when the conditions for the spell are met, flawlessly maintaining Tainted Flesh on the entire party, or interrupting skills with split-second precision, heroes offer some advantages over players. Either way, builds that rely on this perfect AI are gimmicks.
 * Lastly, builds packed with enough standalone imbalanced skills/methods to create one great, overpowered product are gimmicks. Spiritway, for example, in its current incarnation, combines a cheap, maintainable IAS/speed buff coupled with Weapon Spells like Splinter and Warmonger's on top of spammable knockdowns, dazes, and deep wounds; traps to hinder both the enemy's offense and defense; spirits like Life, Recovery, Preservation and Shelter keep the party safe from spikes and overwhelming pressure damage; and Soul Reaping-fueled Necromancer/Ritualist or Necromancer/Monk backlines pump out high-cost heals without losing energy thanks to spirits and people dropping like flies.

Skill "balance"
A balanced skill is a skill that is neither overpowered nor underpowered; a balanced skill is powerful enough to warrant usage, but not so overpowered that it is being used more than skills that are alike. Take, for example, Diversion. The devastating effect (disabling a skill for a minute) is checked by the long cast time and the decent investment of energy, rendering the skill neither underpowered nor overpowered; in other words, perfectly balanced.

Skill imbalance
Skill/build imbalance (often referred to as Imba) is a critical element in Guild Wars; as overpowered skills and builds surface, they become quickly popular and a great annoyance to the disadvantaged "balanced" teams. ArenaNet works to maintain balance by simultaneously nerfing overpowered skills and buffing underpowered skills, thus preventing so-called "build wars."