New Year's, while super crowded, is my absolute favorite time of year to go to Disney. You can still see all the holiday decorations and the atmosphere on the 31st is fantastic. Have rung in the New Year 5 or 6 times, both at Epcot and Studios. Tried Magic Kingdom once when I was a little younger with my family and left around 2:00 to go somewhere else. While we ofcourse expect crowds, MK on New Years is just a whole other beast. And this was about 10-12 years ago.
My favorite park is Studios for New Year's. The DJ/Mulch,Sweat and Tears that rotate on the main stage in front of the Chinese Theater is a blast and you can find a great spot around 10 or 10:30. Always great to take a stroll through the Osborne Lights (if they are still around this December...) and really just enjoy everything. And at least for the past two years Studios has had Extra Magic Hours on NYE so we've had the chance to do TSMM well after midnight with little wait. Whatever park you decide, just be prepared for crowds. But if you do MK, be prepared for absolute insanity.