We have had some luck with building a PVC water balloon cannon. I only let the students take it up to about 75 psi until well after they had graduated and were "responsible" for their own safety. We took it up to about 90-100 psi for a couple of shots, then destroyed it before fatigue (or cockiness) could set in. Your mileage may vary, compressed air is inherently dangerous and we took appropriate safety precautions.
The book "Backyard Ballistics" describes a pneumatic petard that was the basis for our design. I do recommend a video on youtube, however,
http://www.youtube.com/watch?v=_zxlFoZhOC4 to illustrate both the majesty and power of compressed air.
Jason