Hi Jian!
We did Mickey's Very Merry Christmas Party the last 2 years, and my son (2 1/2 in 2009, 18 months in 2008) enjoyed it very much both times. When he really likes something, he'll just sit there "stargazed" with very little movement or talking, enjoying the event. Afterwards, he'll mention some of the things he just saw. He was completely stargazed at the Mickey Party, and you could see his eyes dancing as characters came out...
Yes, there are crowds, but in our last 3 visits to the Party it was never overcrowded. The important thing is to try to find a designated place for yourself as early as you can for the Once Upon a Christmastime Parade and Holiday Wishes.
But it probably comes down to child temperament. If your child does well in crowds, then it should be a cinch. My daughter also did the Party when she was 3. The crowds weren't a problem, but all the music and noises during the parade was a little overwhelming for her (she was laying in Mommy's lap half-way through, wanting to go to sleep :-) The next year, however, she was ready and did very well throughout. So, always something to keep in mind...
If your family has never done it, I'd say go ahead and give it a shot at least once.
Have a Mickey Merry Christmas!