You can also buy a package deal at the hotel where just before midnight they will escort the group out on the street where you can see the ball drop and it included in the past a open bar and food. I know it was very expensive. Same with any of the places that had views (Like over $500 a person). I haven't done any premium packages or gone to the area right by the ball so can't recomend either but others may.

The year before last my friend and I went to the top floor and we were able to get a distant view of the ball dropping and one of the other people watching it from the window had an IPhone app that did the official countdown so we all used his app for the countdown

If you do plan on eating right in times square make a reservation. The cops have a reservation list for the restaraunts and will escort you there. The one year we ate at a restaraunt on Christopher street and another year McCormicks not that far from times square because we weren't able to get into any of the times square restaraunts.

I was happy just seeing the ball drop from the hotel two years ago and last year a friend and I just listened to the countdown behind one of the gated areas on 50th (he wasn't staying at my hotel with me so he couldn't get past the barracades) and we went out right after in Hells Kitchen to a bar. But I understand people wanting to be right by the ball as well, especially if they are paying those high rates instead of using points. One thing they typically do is close off the hotel bar around 11:30 for an hour or so and if you are on the street I would recomend hanging out on the street or going to a bar until after 12:30 because you will have a long wait for an elevator right after midnight.