The Bungalow is a great spectator spot, as already noted it has great access while the racing/practicing is on and there's a good long view of riders approaching and departing including serious acceleration up to Hailwood Heights. I also recall going up there on the Mountain Railway on a non-racing trip to the Island. The railway terminates above the Bungalow near the transmitters and I thought then that this could also be a great place to spectate, you can see even more of the track in both directions but, of course you're not as close to the bikes. Also as almost everyone has noted though, it can be bitter cold and very wet up there even on a seemingly 'nice' day, not somewhere you'd want to be if unprepared.