Well, it wouldn't be stable if we had it that far up while driving. It's very stable when it's retracted though.
As for how we lift it, here's an image that might help describe it a little better:
We have a FP motor attached to a spool (
link [the FP motor had a shield added after that picture]), which lead the whole aluminum arm up and down with two cords, one that would retract, and a second one that was looped around all of the steps on the arm (114ManualLabor was right). The cord was nylon (I think) with a 4-5mm diameter. The assembly was attached with gas shocks to the robot base and moved along a plastic tooth track by a Nippon-Denso motor. The drive train was a 6 wheel tank-drive (using inflatable 6-inch wheels at ~30psi), controlled by 4 CIM motors and the 2 standard FIRST-supplied gear boxes. On the bottom of the back and front we had two 1-inch hard rubber brakes that would stop us from tipping over.