YalBalBot now can drive forward and turn. I am using the Pololu Carrier with Sharp GP2Y0D810Z0F Digital Distance Sensor 10cm and also using the wheel encoders which are included in the 42x19mm Wheel and Encode Set.
To drive forward, an offset is added to the accelerometer and gyro sensor values and the encoders and a PID are used to regulate the offset in order to keep a somewhat constant speed. When an obstacle is encountered, the appropriate wheel motor value is scaled back to cause a turn. The scaling value is a function of what combination of sensors are tripped (left side, right side, left and center, etc.).
Here is the video: