What happens if the ball bursts after being kicked and made contact with during a penalty kick?

Answer (March 6, 2014):
Your answer is contained in Law 2 (THE BALL) of the current Laws of the Game:

Replacement of a defective ball
If the ball bursts or becomes defective during the course of a match:
• the match is stopped
• the match is restarted by dropping the replacement ball at the place where the original ball became defective, unless play was stopped inside the goal area, in which case the referee drops the replacement ball on the goal area line parallel to the goal line at the point nearest to where the original ball was located when play was stopped

If the ball bursts or becomes defective during a penalty kick or during kicks from the penalty mark as it moves forward and before it touches any player or the crossbar or goalposts:
• the penalty kick is retaken