Does anyone know the name of an 80s cartoon with the theme song "The heat is on"? I think it had a hot air balloon during the introduction as well.

I found this on an episode of Alvin and the Chipmunks called Every Chipmunk Tells a Story - the song you mentioned is not the theme song, but it starts in this episode at 8min44sec...
Watch Videos Online | Every Chipmunk Tells A Story | Veoh.com (http://www.veoh.com/watch/v14513842WqCH3EHb?h1=Every+Chipmunk+Tells+A+Story)

Yar. In my hours of searching Google and other sources I came across that as well, but it wasn't Alvin and the Chipmunks. :( I'm trying to find the show for a friend who remembers it from her childhood. The only details she has though are that it had that song playing during the opening theme and there was something about a hot air balloon. I found someone else asking a question that was potentially about the same show and he asked:

"I m looking for a cartoon from the mid 80s that had “the heat is on” song by glen fry for the show. The cartoon was about these kids stuck in some other demension with wierd “melting” scenery. Can't remember the name."

The opening wasn't "The Heat is On" but it
Did involve kids stuck in another world and
The song did appear in a couple of episodes

Maybe,.

Kidd Video

I tried Kidd Video but that wasn't it. Some additional details that may help though:
The opening contained teenagers in a hot air baloon
The teenagers in at least the opening were live action and not cartoons
Most of the episode(s) may have been mostly live action.