For the absolute best fireworks you'll see in the greater Vail area for the Fourth of July, head over to the town of Avon. At the lakeside park they have a fantastic kids area, carnival fare, live music, and lots of picnic spots by the shore. Get there early enough to stake out the best seat in the house.
Word of caution for this fabulous evening: if you can walk or bike to it from where you're staying you'll avoid the absolutely horrid traffic. Just don't forget to bring your flashlights and headlamps!