Wow, us DC locals are bad about answering. I'll use the fact that I haven't logged on in months and didn't see this.

Its not too bad, provided you're not in the city on the actual 4th. Many parts are ok, but the increased traffic (both on foot and driving) can cause issues. I'm pretty sure all the museums are open, and the monuments are as well. The mall is crazy, and they're now fencing it off so there are limited numbers of entrances and exits. This makes for long lines (especially as it gets later in the day), but more frustrating is standing in line to get into the middle of the mall, knowing you're just going to cross and be out on the other side (assuming you're going to museums and the like).

If you like people and don't mind crowds, then definitely go, you'll have a blast. If you're not that fond of crowds, go anyway and just plan things out. And let us locals know if you're definitely coming.