We did this last year. Our marching band was in the parade. I watched it from the Central Park/John Lennon Dakota apt complex area - toward the start of the parade route. Others watched it from Times Square around the Planet Hollywood area. I was lucky enough to have a grandstand seat. The others in Times Square of course, had to hold spots on the curb. It seemed to be to be more vibrant in the Times Square area. We enjoyed it immensely. It's something everyone should experience.
Interestly enough, I watched the parade pass by, got back to the hotel in Jersey in enough time to grab a Starbucks and watch on TV our band perform in front of Macys. So I got to see them twice!