Most of the boats (some of them are floating restaurants) contribute their own display, making a brilliant backdrop for the meringue that is the city's Opera House.
Usually-cynical Aussies, tinnies to hand, flock to the waterside in their thousands to watch the pageant, because it is totally thrilling to watch. And in fact they do it twice: at 9pm for the kids, and then again at midnight for grown-ups who presumably have had time to settle their youngsters abed.
A few years ago Sydney citizens were treated to an extra display. The prime minister appeared on television, revealed that the city had won the competition to host the 2000 Olympics, and urged everyone who could, to get down to the harbour - and those who couldn't to stand by their TV sets.
Anticipating victory, they had decked the SHB with fireworks, new year style. The PM also took the opportunity to announce a public holiday to celebrate the good news.
They do things in style in Sydney. It's impossible for me, a fan, to imagine how they might celebrate the next New Year's Eve - the start of a new Millennium and their own Olympic Year.
The other final contenders to host the Games - as we have been reminded in the last few days - were Manchester and Beijing.
One wonders how Manchester would have celebrated - pints all round in the Rover's Return, probably, and maybe a Roman Candle in Piccadilly.
And, exotic as Peking might have been, it probably has fewer Chinese restaurants than either Sydney or Manchester - and it certainly cannot have better ones.
In other words: no contest.
Odd, then, that anybody should bother to bribe members of the International Olympic Committee in the hope that a few fur coats and holidays would induce them to site the Games (that is, the athletes, the fans and, most importantly, the superstructure and the business) in somewhere like, say, Doncaster, in competition against - well, anywhere you care to name, really.
Except that, when you learn that from all the world they have plumped for Salt Lake City, you just know that there's a rabbit off somewhere.
It will come as no surprise, then, to learn that your very own International Alumpic Committee has been convened, has counted the amount of UK-based baksheesh, found it sadly lacking, and come down in favour of Los Angeles as its venue for a Graduates' Dinner on 23 April in this, our 30th year.
A few extra fur coats, it's true, might have swung the voting in favour of Barrow-in-Furness, but it was not to be.
This, by the way, is not a joke. The anniversary dinner will definitely be held in Los Angeles (the one in California); it will definitely not be held in Barrow-in-Furness.
At least, not this year.
That date, also St George's Day and Shakespeare's birthday, is the actual anniversary of the OU's receiving its Royal Charter.
The International Alumpic Committee is also disappointed (or relieved - some people believe that you can't go too far east) to announce that Grimsby was outvoted by Singapore for 13 July (please note change of date), as Brussels beat Berwick-upon-Tweed to the punch for 11 September.
In either case, a bit of Olympian palm-greasing might have made all the difference
London's Millennium site has scored, obliquely, in that the main celebratory dinner of the series - the only one with a Black Tie dress code - will be on the River, on the first of the brand new river-liners introduced to ply between Central London and the Greenwich Dome.
The dinner cruise sets sail on 19 June - that is, after, rather than on the eve of, Central London's graduation ceremony.
Bookings can be made now for these and other dates by ringing 01908 655751.
Most dinners cost only pounds 20 and will be followed by a disco or after-dinner speaker (or, in some cases, by both).
In the majority of venues, overnight accommodation is available at a special rate at the hotel where the dinner is being held. This will be especially suitable to graduands attending ceremonies the following day - but the dinners are open to the entire OU community, old and new, as well as to their guests.
More importantly, perhaps, there is no geographical restriction.
If you had been toying with the idea of celebrating this year at the Peking Palace in Barrow you can opt instead for Singapore, Los Angeles, or even, closer to home, for Burnley (7 May).
The other venues and dates are all on the Noticeboard on our website (www.openlink.org) but please note that spaces are limited, and reservations are being made now.
It is a great opportunity to meet other grads and graduands in your locality and to share experiences of life after the OU.
There is one (a life, I mean) as many graduating students have already discovered: it consists of deciding, with gratifyingly increasing frequency, that the ordeal was so incredible they want to go through it all again.
Come along and meet them.
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