Alert! The Magic Kingdom is reputed to be a madhouse on July 4th (as well as many holidays). Probably too crowded for fun. The fireworks are awesome, and can be seen from around the MK too. You can make a PS at a resort restaurant "with a view" -- like Ohana at the Polynesian, and watch the show from there. We did this two summers ago and it was a real treat.
The DVC resorts will also have activities for the 4th in case you want to avoid the parks that day. OKW had crafts and activities around Hospitality House. July 4th is a busy time, but also fun and bustling and exciting. Have fun!