Arguably the best place to watch it is in Sukhothai, where an epic light and sound show is followed by the release of thousands of lanterns happens in the 19-21st. Can you imagine the combination of the historical ruins of the ancient capital and the transcendental lanterns? (Note: accommodation is near to full already, book TODAY if you want to take part.)
Chiang Mai is also a great vantage point from which to see lanterns carress the night time sky for about that whole week, starting around 14 November when a large send-off from San Sai near Maejo University in the city's north is a spectacular tradition.
It's like watching tracer fire in slow motion, jing jing! Except the intentions are far more peaceful and beautiful. Er, unless you live next to Big Pete, who adds firecrackers to his lanterns and they explode with fury right above your house!