How accurate are altimeters?
If you base your design loosely on the Parrot drone, they use a downward facing ultrasonic rangefinder.  I'm not sure of the exact brand, but it looks like a PING or Devantech rangefinder.

Different model numbers vary in their range and accuracy.  Most are in the 2-5 meter range and have an accuracy of about 2-5cm.  Obviously, the more you pay for the sensor will determine how accurate the sensor is.

Both Acroname and Sparkfun have good selections of ultrasonic rangefinders.

You may be able to also use a different type of rangefinding technology.  I have seen IR and laser rangefinders used in many robotics applications.  For a quadrotor, the ultrasonic rangefinder seems to be the best in terms of cost and performance.