That is just what some MIT students did with entirely off the shelf gear.  Check out the story here, and their website here.  They go into some detail about how they did it, but I wonder if they would consider posting the full plans as an open design project.

Update 9/15/ 2009

Here is an update from Andy about this project:

“RE Pcsw from Space:  Their website has an update today saying that they plan to post a step-by-step soon and hope to have the stop action series of photos on youtube tonight.”

Also, on a technical note, “from space” is a slight over statement.  Turns out the pics are from an altitude of about 17.5 miles, or about 25% of the way to space.  However, the pics are of the edge of space (you can see the curvature of the Earth and the blackness of space).  I wonder what night photos pointing down would look like (or up for that matter).

Update:   09/16/2009

This same story was picked up on the NPR Marketplace Morning report this AM.

In addition to general coolness I want to point out how quickly this went viral.  Stories about groups of people doing cool things with just a little bit of money are crazy contagious.  I think this could be an important lesson for us–when we are ready to move forward, what can we do to emphasize rather than hide our small group with a big dream identity.

Update:  09/24/2009

Here is another team’s flight report, this time in HD Video.

So, I have been thinking, what could we do along these lines?…  and I had an idea.  What about launch two just a few seconds apart so one takes pictures of the other?  How cool would it be to have pics of the mission at altitude, in addition to the pics of the Earth and space?  Any takers?

Update:  03/22/2010

Check it out, Arduino used in high altitude balloon.  The project is call the Ferret (project page).

Update:   02/07/2010

Another cool link…  Arizona Near Space Research