I need to book a hotel for new years (31st and 1st) - which is a better choice Ollantaytambo or Urubamba?

don't know about urubamba, but we loved ollanta. did the sunday market in pisac, then taxied to ollanta for 1-2 nights. great ruins. small town. just like in cusco, we enjoyed just "being" there.............

Loved Ollantaytambo and spent several days there. It's a very small village with very friendly people and it was fun to hike the area and just hang out in the village. The ruins were also worth seeing.
Had lunch and drove thru Urubamba so I can't comment on what its like to stay there.

They are just up the road from each other, so it doesn't really matter.

Personally, i would stay in Cusco for New year's eve - its a fascinating cultural event and the Plaza de Armas is filled with people.
Do a google search for "new years eve in cusco" you should come up with pictures and descriptions.
If you want to stay in a sacred valley town, Ollanta is lovely, Urubamba is less tourist-oriented.