Where is the best place to observe Tazaungdaing in Nov? I know Taunggyi is famous for the festival, but am wondering if there's somewhere smaller and more low-key to celebrate. 

Are you looking to see actual balloons?

 

I've only ever been to Burma once, and it was during this festival, but it was my understanding the main actions only happens there.  I was in Mandalay, and many people were at bars/tea shops watching it on TV.   Take my advice with a HUGE grain of salt, because I really don't know the correct answer.