Fire Ballistae are useful siege weapons which can be recruited from either the Siege Camp or the Engineer's Guild. Note however that regardless of which building you choose to recruit this weapon from, you must have an Engineer's Guild placed in your Castle to be able to recruit one.
Fire Ballistae can attack troops, enemy siege camps, enemy siege equipment as well as wooden buildings and can destroy virtually all of them. These are especially useful at taking care of armoured units on the map who may pose a problem for other units. Because the range of a fire ballista is so long it can potentially take out several units in a group before any of them actually get anywhere near the Fire Ballista itself.
Note: In Stronghold 2 patch 1.3.1 the Fire Ballista will fire automatically when placed on aggressive stance. This behaviour was changed in the later 1.4 patch, and has remained the same ever since, meaning that in the newest versions of Stronghold 2 the Fire Ballistae no longer fire at enemy units automatically.
In other words, you must manually fire your Fire Ballistae at enemy units in order to attack them. Maps initially created in 1.3.1 with Fire Ballistae set to aggressive stance and then played later in 1.4.1 will still contain this automatic firing behaviour.
This makes a group of these weapons extremely useful in taking out enemy units. You can recruit Fire Ballistae from the rank of Earl. You will need 150 gold as well as 2 peasants from the campfire before you can recruit a Fire Ballista.