The violence is never funny; however, anything that starts is usually directed towards the Police, not bystanders. You can be enjoying the music, dancing, food and drinks in the sunshine and 40m away around the corner there'll be watercannon shooting at the Crusties. Surreal experience.
The celebrations are a joy: it's a real multi-culti atmosphere and great fun to see people enjoying the holiday. Ignore the horror warnings but use your sense: if you see a group chucking bottles in one direction, go 45° in another.
The Police are usually plainclothed as well as in full riot gear and mingle in the crowd. You can spot them easily enough by the Dunkin' Donuts baseball caps they wear
They're often very heavy handed: CS gas, dogs, batons etc. All a little provocative, in my opinion.
Businesses like McDonalds and Starbucks get a little nervous: windows sometimes get smashed and conspicuously expensive cars may get a kick.
On the whole, don't panic, it's usually very localised and not a reason to miss the festivities.