If a weather balloon is being used to launch the spacecraft, then it'll pop automatically when it reaches the highest altitude possible. A single-axis accelerometer (plus a microcontroller to do a bit of processing) will be able to provide an electronic signal indicating when the aircraft changes direction from 'going up' to 'going down'. There's a risk that the balloon pop could damage the spacecraft, so maybe the release should simply be triggered by a countdown timer from launch. Or a barometric sensor (e.g., http://www.sparkfun.com/commerce/product_info.php?products_id=8161) could trigger the release at a given height.
The release itself could be made from a piece of string tied around/alongside a low-ohm, low wattage resistor. Apply a modest current and the resistor will be set on fire and burn through the string, releasing the aircraft. Further experimentation will be required to see identify what weight of batteries could provide sufficient current. Failing that, I recall an article in the Anarchists Cookbook (or similar publication) about making an ignition device using a diode taped to a match-head. Once enough backward current is applied to the diode it heats up and set's the match alight. But of course both of these assume that there's enough oxygen at release height for a fire-based release mechanism.
Although not as exciting, a mini solenoid could be an alternative to un-hook the spacecraft from the balloon: e.g., http://www.rapidonline.com/searchresults.aspx?mode=b&kw=&manu=Dialight+BLP.
What is the target height for the launch, btw?