In the weeks before Nyepi, Balinese youth organizations get busy building giant papier-mache effigies of evil spirits or depictions of environmental or societal issues. Each village creates an ogoh-ogoh and they can be seen being built along the roads (even in the city) with tarp-covered bamboo scaffolding around them, blocking part of the road but with a polite "hati hati" sign ("be careful").
On the night before the new year, the ogoh-ogoh are set upon bamboo platforms that the men hoist up on their shoulders and dance them through the streets spinning them around to confuse the evil spirits and playing loud music to chase them away before the new year. They used to burn them at the end of the night (and they still do in the smaller villages) but the streets are too crowed in Denpasar for that. Many of them are now burned in a graveyard the day after Neypi and a few on the beach at Kuta.Although you'll find ogoh-ogoh being danced through the streets of many villages on the island, the procession in Denpasar is by far the most spectacular. It has the longest route, with the largest ogoh-ogohs, and the shear number of "floats" keeps the festivities going until 2am!
Walking around the city, you'll easily see the huge scaffolding along the roads where the giant detailed demons are being created out of wood, Styrofoam, bamboo, and paper and are somehow built so that they look like they're floating in mid air and even bounce around and move when they're carried. They are carved, papier-mache'd, painted, clothed, decorated, and cost as much as 55,000,000 (about $3,500!) by the time they're completed.
After making their way through town, ogoh-ogoh ranging anywhere from 3 ft to 30 ft tall take their turn entering the intersection from the West and the North and that's where they really turn it on. The bands bang on their drums, gongs, and symbols, they run their demons around the roundabout (ideally 3 times), they spin them around, shake them (sometimes to their demise), turn the colored smoke on, and even spar with other demons! It's such a sight and so much fun and really quite tiring cheering and getting jostled around in the crowd for so many hours. People start claiming their spots around the intersection at around 6am, by 7pm crowds fill the sidewalks and the middle of the roundabout in front of the statue, and as the night goes on it becomes practically a mosh pit with barely enough room for the ogoh-ogoh to get through.
If you can get a spot in the pagoda in the Northeast corner, you're golden. Otherwise try to get a spot standing on a ledge or even a trash can. Being in the front on the street is great too, especially for photos, but be prepared to get shoved around and possibly knocked in the head by the bamboo "raft" as the floats are run around the circle. If you stay at one of the nearby hotels, it makes for a great night since you can walk from your hotel. I stayed at the Inna Bali Heritage Hotel which is the second building up the from Patang Catur Muka. Once I was exhausted from being in the main area, I pushed my way back to the hotel and enjoyed a total different atmosphere.
The ogoh-ogoh line up along this street (as far as the eye can see) in wait for their big moment in the roundabout. It's so much quieter along this road but also very fun and busy. It's such a community event! People sit on the ground in the hotel parking lot and along the sidewalks and there are food stands all over grilling corn on the cob or satay skewers and selling by candlelight.
If you are staying in Denpasar, go check out the strange kissing festivities (Omed-Omedan) in Banjar Kaja Sesetan (Jalan Sesetan between Jalan Pulau Saelus and Jalan Pulau Buton) the day after Neypi.