There was a website that I had bookmarked that was made by a guy who had done exactly what you are trying to do. I can't find the link at the moment...
He pressure tested various ways of preparing the bottle to make it work at higher pressures. He ended up wrapping it in carbon fiber, and pressurizing it remotely with N2. He made a special De Laval nozzle for it, and used a mixture of soap and water. The benefit of the soap is that rather than just spitting out water, you can propel a soap/water/air mix, which expands in the nozzle, giving you (I think he said) 20% more thrust.
The deal with bottle rockets is that the the neck of the bottle is FAR FAR FAR too large. You need a restriction of some sort to take advantage of all of that mass. Remember KE=1/2mv^2, so the faster you have the mass moving, the more energy you get out of it, propelling you upward (yes I know that is overly simplifying it, but it gets the idea accross).
edit: ok, I found the people who did it:
http://www.antigravityresearch.com
but I can't find the site where they discribed everything they did. Check out their videos, and you can see their 1242' lanuch, at 1150psi in a single stage soda bottle.