I tend to watch the ball as it goes upwards. The next place I look is where I think the ball will bounce in the court. By looking there, you can get a peripheral of the incoming spin pre-bounce and serve direction, but more importantly, the action of the ball after it hits the court. This is especially important on the second serve since the ball moves a lot more and you will be forced to return a little "harder".
On first serves I watch the impact to get the direction. After that, I look into the court where I think the ball will bounce in the court and then try to meet the ball with my racket. Against big servers, I dont get the luxury of watching the ball actually hit my racket, lol.
"In the 1980's two men dominated--sometimes each other, most of the time everyone else."