Good question! Is the grad nite at the beginning of your trip? The end? Middle?
If you want to see the fireworks from the castle, then as mentioned, you should try to do them at the earliest day possible. (That said, if it's predicted to be quite windy that day, you might consider doing Fantasmic! instead. High-elevation winds cancel the fireworks shows and it's very frustrating to wait for fireworks for an hour only to have them stop part-way through or have the effect you were waiting to see (Dumbo, cough cough) not show up.)
If you don't mind seeing fireworks from a less optimal location you could actually do both on Grad Nite (see Fantasmic and then watch fireworks from where you sit). There are some rumors that they are going to revise the Magical fireworks for 2010. If they don't, however, then if you're not actually a fan of Dumbo I think it's kind of OK to see the fireworks from elsewhere in the park. I'm certainly not telling you not to see them, but I did not really enjoy spending 3 nights out of 4 in the parks attempting to watch fireworks from Main Street/the castle area. (Only saw Dumbo once.) To me, it wasn't really worth it.
Have a great trip!