Fireworks on the 4th of July is an excellent time to experiment with the different modes or manual settings on your camera. You can get some very interesting pictures, shots you never thought possible. Here are a few tips to help make those shots great.
Stablize your camera - Beg, buy or borrow a tripod if you don't have one. You are shooting in low light using a long exposure. Any camera movement will turn your fireworks shot into an abstract. If you don't have a tripod, experiment anyway by creating some stable platform. Just setting the camera on a table might not work as you need to point up into the sky. A tripod is the way to go. Small flexible "Gorilla Pods" are great for Point and Shoot cameras and wrap around any fence post.
Use a cable release - another way to keep your camera stable is to use a cable release or remote control to take the picture. You can try a time delay, but that adds complexity to timing your shots.
Look for the "Fireworks" mode - Many modern cameras have this mode for taking night time shots. Landscape mode will also work. Set your camera to these modes and shoot away.
Go manual and use a slow shutter speed - The best method is to use the manual settings on your camera. An f/8 aperture is always a good place to start. ISO 100 will give the best quality, no need to go any higher. Use very slow shutter speeds. 3, 4 or 5 seconds will deliver good results but you want to experiment. Faster shutter speeds will create a more staccato affect while the slower speeds draw longer lines from the falling embers. The ultimate is to use the bulb setting and manually hold the shutter open for what you decide is best.
Multiple exposures - Using the bulb setting, lock the shutter open and place a black card in front of the lens between single bursts. Every picture can look like a grand finale.
Stay upwind - Smoke from the fireworks reduce your visiblity and muddy your pictures. If it looks like fog will be a problem, get closer to the launch point.
Show the people - Turn your camera towards the other spectators. The light from the explosions will light their astonished faces in technicolor.
Focus - This can be tricky. Autofocus may try to adjust with each picture. Turn it off and set your focus to infinity. Or adjust focus manually during the first few displays. Fireworks mode should do that for you. Try some out-of-focus shots too. Experiment, what the heck.
Anticipate the shot - You can see the trail of sparks from the rising rockets and after a few displays, you can guess when and where the explosion will likely happen. Time your shots appropriately.
Show something else - Many pictures benefit from something else in the picture for context. A lit landmark like a bridge or famous building is nice to include in the fireworks picture. Scout out good locations days before the show. Look at the work of others (Search Flickr) and determine where they were to get those great shots. At least show silhouettes of people looking up at the sky. It really makes a difference.
Finally, Enjoy the show - Once you dial in some good settings you don't need to watch everything through your viewfinder, just sit back, hit the shutter release and let the camera do the work.