The best spot to have is at the end of Main Street, where you can view the buildings, the Matterhorn, and the castle.
This is also the prime spot to experience the new fireworks show, Disneyland Forever, which starts 10 minutes after the parade ends.
Be prepared to watch the show ALL AROUND YOU. The buildings on Main Street come to life with colorful and animated projections. They even miraculously grow anemones at one point! The castle and Matterhorn get transformed into various scenes. Make sure to look up to catch Nemo and Tinker Bell fly across the sky. At one point, the castle is on fire, and it starts to snow. It's pretty intense.
But if you weren't able to watch it on Main Street, there are two other unique locations to view the fireworks! You can watch it at the Rivers of America, where they use water screens and fireworks on the water. Or you can watch it from It's a Small World and watch the ride come to life with colorful animation.