I wrote this a few years ago waiting for a thread like this to come up. I am aware that some of the dolls I mention here are discontinued and that RealDoll now has some competition.
I have a doll challenge for you.
Most of the doll news has been focusing on the Realdoll, an intimate, posable mannequin using a silicon mold on a steel skeleton. While realistic, they have three major drawbacks. First is weight: 60-100 lbs. Second is storage: they don't collapse neatly into a box. Third is the obvious outlay: $5-7K.
The first issue I want to address is materials. Vinyl is cheap and easy but weak. Latex is better but more suited for paint than dolls. I think you could take a page from the whitewater raft industry and look for materials they use. I found this at
http://www.isu.edu/outdoor/raftequp.htm:
"Materials. Inflatable rafts are constructed of a stronger tear-resistant base fabric made of such materials as nylon, Dacron, or Kevlar. To provide resistance to abrasion, the fabric is coated with a synthetic material such as neoprene, Hypalon, neoprene-Hypalon blends, or polyvinyl chloride (PVC). It is difficult for the consumer to tell the difference in the quality of the materials used in the construction of boats since a wide variety of manufacturing processes and qualities of fabric and coating are used Generally, price is the best guide--the more expensive the boat, the better the materials used--although a few exceptions exist, such as when a manufacturer sells directly to customers, avoiding middlemen. First learn from friends what works best for them and buy from reputable companies."
I'd like to see at least a test of an inflatable doll made from neoprene-coated Kevlar.
I've seen a few attempts at posable inflatables. Alexa's Essential Elements and Gina Lynn are limited to arm movement. Winnie Wiggle moves both her arms and legs, but is otherwise mediocre. What I want to see, that no one has tried to my knowledge, is a modular inflatable made of several shaped sections connected by posable joints. The benefits:
1. Simplified design. Most inflatable dolls, especially the deluxe versions, require special forming and design that inevitably lowers effective yields. If you don't have to build the entire shape into one balloon you can save a lot on materials.
2. Flexibility. The more sections you can divide a doll into, the closer you can get to the build-to-order model of Real Doll. This can be done to extremes (knuckles) at the high end.
3. Strength*. Dividing a doll into sections removes the need for many of the seams that cause most failures. Theoretically, dividing a man’s weight more or less evenly on three balloons should make the load more bearable. The review of Letha Weapons indicates that this strategy has real potential.
4. Versatility. Doc Johnson's "Dream Girl" series has four dolls, one for each primary pose. Now think of one doll filling all four roles and many more.
5. Maintenance. Customers have the option of replacing or upgrading sections instead of entire dolls.
Now, how to make the joints? Use a large ball socket for multiple-axis joints (shoulders, hips, neck, wrists). Each joint piece is made in two parts that are glued on each side of the balloon. You can employ a male and female design or a double ball (three parts: female sockets in the two balloons to be joined and a male-male double ball connecting them). Silicone is best but any reasonably strong plastic/rubber combination that does not risk discomfort to the user is acceptable. For increased mobility I recommend the double ball.
For single-axis joints (elbows, knees, ankles, knuckles on fingers and toes) just use two smaller ball joints at opposing ends. One of the balloons will form two outer “fingers” of the joint and the other will form the narrow inner joint. Male/female joints are needed with the male joints on the outer fingers.
The only drawback I see is multiple inflation points, which can be ameliorated with check valves and a small straw-like tool for deflation.
The entry sleeves can be fixed in place using a modified version of the female joint socket with the inner end open. The socket pieces glue onto each side of the sleeve, which should be made in one piece. The exterior socket section can be molded to taste. This will add a lot of strength to what would otherwise be the most vulnerable areas.
A no-frills version (basic head, hands, and feet, no extras) should run about $100. A deluxe version (articulated hands, feet, fingers, and toes, mannequin head, optional vibrator/pump/perfume) should cost $500. The idea is to get as close to the quality and durability of the solid dolls as possible using inflatable, stowable materials.
Are you up to the challenge?
Howdy 
