An experimental spacecraft was launched into orbit for testing purposes. If the technology is successful we could see an inflatable space station as early as 2015:

Genesis II is an inflatable module designed and launched by Bigelow Aerospace, a private company founded by an American hotel tycoon. The inflatable and flexible core of the spacecraft expands to form a bigger structure after launch. Billionaire Robert Bigelow hopes to use inflatable technology to construct a manned space station by 2015. Inflatable spacecraft are attractive because they take up less space on their launch vehicle than solid components and therefore cost less to place into orbit. Genesis II was launched on board a Russian rocket, and successfully separated from its launch vehicle 14 minutes after lift-off, engineers said. Communications were established with the craft after a short delay, before the module beamed back a series of images of its expanding solar panels. Officials said the craft was functioning well, with communications and air pressure as expected.