Balanced

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

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

What isn't balanced?
Players that rely on a specific set of skills, often using many copies of overpowered skills that have a great synergy between them, 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 often rely on the primary attribute of their chosen profession (for example, 8-necromancers team can spike effectively targets down while having nearly unlimited energy with Soul Reaping).
 * Builds that rely on hero AI are gimmicks as well. Heroes may perform certain tasks better than most human players, for example keeping up Tainted Flesh on every party member at all times with ease.
 * Lastly, builds containing many powerful skills or methods that synergize well with each other, such as "Heroway", which uses a maintainable Speed Buff and IAS to knockdown, deep-wound and daze opponents while exploiting the Hero IA to maintain Tainted Flesh on party members and having unlimited energy with Soul Reaping-fueled healers. These builds are considered easy to run and become very popular. As such, it is considered wise for balanced teams to bring counters (for example, monks bringing Aura of Stability to nullify daze and deep wound from Heroway's "thumpers", setting their damage level to manageable amounts).

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 possibly too effective. As such, ArenaNet works to maintain balance by simultaneously nerfing overpowered skills and buffing underpowered skills, thus preventing so-called "build wars."