Second only to Rio de Janiero, Valparaiso attracts tons of spectators every year as everyone crowds the city to watch the fireworks display. It is probably Valparaiso/Vina del Mar's biggest event, as it draw hundreds of thousands of visitor each year. If you happen to be in Chile to bring in the New Year, there is no better place to be. The actual fireworks go off from the waterfront at Valparaiso, but another great place to watch the spectacle is from the beaches 10 minutes away in Vina del Mar. This is where we viewed them, and it was not nearly as crowded and you could still see them fine.
I would recommend Vina for a more laid-back atmosphere, but viewing them from Valparaiso also has its advantages for those who are planning to party till the wee hours of the morning. In Valparaiso, the streets are packed with people, more like Times Square, and they have huge clubs/raves going all night long. This event is nice because it doesn't cost anything to sit on the beach and watch an incredible fireworks display. Really, this area is the place to be for any traveller to bring in the New Year, because they have something for everyone, from the laid-back tourists to the partygoers and everyone in between. Make reservations ahead of time if you plan on coming.