I like to watch the fireworks from Main Street. Somewhere between the Camera Shop and the Partner's Statue (anywhere in that area is good). I usually aim to get there about 45 minutes early.
The most popular spots are between the Partner's Statue and the Castle. I've seen people sitting there hours before the show starts.
Another popular spot is over by Small World Mall. I tried to watch them there once, but that was a night when they were cancelled due to wind!