In December, during one of the cold spells, the view from inside the restaurant was great. No one was outside on the veranda. However, I've read that when the weather is better, people go outside and block the view of those that remain inside.
Also, people have said that some tables do not have a view of the fireworks. When you sit down, if you can see the castle then you'll be fine (as long as people aren't on the veranda blocking your view).
For the fireworks, they dim the lights and pipe in the music. The Water Pageant is more of a little show, where each float lights up individually and by the end of the parade they're all lit. They're stationary while they do the 'show' - so unlike a normal parade where the floats pass you by, you can see all of them until they move off to the next location.
As for the food, we loved Narcoossee's. Everything was really well done; overall it was the best (favorite) meal we had on that trip!
Here is a picture of the Electric Water Pageant from the veranda. I went out briefly and then decided it was too cold and went back in.
Here are some photos of the fireworks from our table (inner row, first level). The castle is the bluish blob in the first picture.
