Hi
A couple of years ago I was one of those that queued up round near the point that is close to the botanical gardens and it had a huge queue that zigzagged half way round that part of Sydney for more than a kilometre. I was waiting in line for about 1.5 - 2 hours in the hot sun and when I finally was able to get in the place I was able to sit, didn't even have a full view of the bridge. I got very badly sun burnt (close to third degree burns and I was wearing sunscreen) which I still have scars from it close to 2 years later and was badly dehydrated and had heat stroke. I was there from about 12.00noon on but despite all the pain it is worth it to see one of the most amazing sites in the world to see the harbour bridge go off with the display. You are correct about the drinks (alcohol at least). They get you to dispose of it on entry so when you get close to the check point you see a whole load of bottles of beer that are still unopened.
Last Year I went again and this time I booked on a cruise. I was able to walk around town for a while and at 6.30am I was out and about and already about 30 or so people were queueing up at the checkpoint so to get a great spot you'd need to be up at or before 6.30am. The cruise I went on last year was great and by NYE cruise standards wasn't too expensive ($350 but was BYO food and drink very no frills). It was part of the light parade before the fireworks starts and got prime position right in front of the bridge. I've booked with the same company again this year and it is still $350. If you do a google search for South Passage you may find some info about it if you are interested but I'm not sure if they will have any spaces left as I booked a few months ago and they only had a couple left then. Most the cruises are well over $500 p/p.
You'll have a great time which ever one you opt for but paying that extra money not to get heatstrooke, severely dehydrated and badly sunburnt would be worth it.
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