We did not know about this until our last trip -- guess we are not as informaed as we thought we were!
You can see it basically anywhere from the turnstyle area before they actually open the park. As long as you can see the train station, you will be able to see the show.
It is pretty brief. The mayor of Main Street opens with a few words, then about a dozen or so CM's in "Main Street" attire do a neat song and dance. The mayor announces the train and it begins to pull into the station LOADED with characters. A family that has been preselected is on the train with the characters, and officially opens the MK with a count down and a handful of pixie dust.
As for arrival time, anytime before the MK opens is probably good. We just happened upon it on our last trip, and seeing all those characters at one time, and the atmosphere and all brought tears to my eyes!