I'm always in a state of "cringe" when I balance a prop. It just seems like I'm abusing the prop/engine running it hard on the ground like that. Since I own the equipment, I decided I'd do it airborne on my latest prop/engine combo.
I found it darned near impossible to get consistent results while airborne and ended up going the traditional route of multiple ground runs with minor tweaks each time. I wound up with a great result (0.03ips @ 2400rpm) and the smooth is noticeable. I've got a basic Aces balancer... similar to the basic DynaVibe--Ford vs. Chevy near as I can tell.
For anyone embarking on the prop balancing path for the first time, I advise caution. It's easy to get out of your routine and break something. I was helping a friend balance the prop on his beautiful Giles G200 and he forgot to latch his rear-hinged canopy. I stood at the wingtip with the balancer in hand as the canopy violently departed the aircraft and scattered itself in little tiny pieces over a 100 foot debris field. I've also heard of prop strikes when the tail floats up. It seems like a straightforward process, but it's fraught with peril.
I've helped a few friends balance their props and I've done a few of my planes since the G200 incident, but I brief the process thoroughly each time and have a deep respect for the potential pitfalls.