We've been to the "Balloons" several times. Best place to stay, if you can dry camp, is at the festival RV parking. It's just across the road from the balloon field and they run shuttle busses every 15 min. or so both directions.
http://www.balloonfiesta.com/guest-guide/rv-information
If the wind is just right we've seen them fly right over the RV area!
We wouldn't park anywhere else...
Edit: Because you're just across the street, Go see everything!! Mass ascension every morning. Balloon Glow at night the museum, Everything.