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New Year's Eve trip to New York City

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We are looking to take our family of 5 to New York City from Dec. 26-Jan 2, 2010. We have never been to NYC and are looking for suggestions of hotels, sights to see. Our kids are 13, 16, & 18. We would like to "watch the ball drop" on NYEve, but don't know if it's crazy (meaning so crowded you can't stand it). Does anyone that has done this before around this time of year have any suggestions? Are we crazy to think we could book a descent hotel and get a flight this late in the year?

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