Here's a video I took the other night...like I said, I was standing close to the bottom, which is where half the people stand, to see people come right by you. You can also stand a lot further back and get the entire effect, like this: http://www.youtube.com/watch?v=3aUGb4aNsQE. Either way, it's worth the trip!
One of the things I've wanted to do since I got to Alaska is attend the New Years Eve Torchlight Parade at the Alyeska Resort in Girdwood. Girdwood is only a 45 minute drive from Anchorage and every New Years hundreds of skiers and snowboarders volunteer to ski down the mountain while holding torches. Afterwards, they have a huge fireworks display. They do it at around 8PM, so everyone comes to this before going to their official New Years Eve celebration. It's a completely amazing sight...they turn off all the lights, and the further back you stand, you can see lights all the way from the very top of the mountain streaming down. I stood a little closer, so that I could actually see them skiing by at the bottom. Here are my pics, although it's really hard without a tripod to accurately capture the coolness of this! The top pic I found at a website describing the event as one of the top 10 New Years destinations. It gives a better sense of the big picture. I had no idea how many people would be there, as you can see there were plenty of crazy Alaskans up for it!