The balloon was dragged along by a rope attached to it and, in order to make it appear to be going forwards, the film was reversed. This is why the villagers stood still when the balloon passed.
Yes, it's name was Rover. The village is Port Merrian (if i spelt that right) in Wales. Patrick McGoohan I belive was the actor.. known as Number 6. His famous line was "I am not a number". The car was a Lotus 7. Caterham, westfield, etc, make cars like that.. go buy one, they're fun.