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There are grassy viewing hills that run beside the track in the infield for both oval
races and road course races.    
See map

The viewing hill near Turn 2 of the oval is supposed to be alcohol free.

Indy 500 general admission costs only $40 at the gate - CASH ONLY.
Brickyard 400 g.a. costs $30.

A large music/party zone is set up in the turn 3 infield on race day for the Indy 500.
Called "The Snake Pit", admission tickets are required and they feature DJ music.

Sitting inside the oval has its good points. It is easier to access all the
amenities inside such as Gasoline Alley, the Museum, and entertainment
stages. There are always things to see in tents that will be set up, usually
around the Pagoda Plaza or Museum area.

If you park in the infield, you can return to your car to fill up your cooler or
drop souvenirs off, etc.  

Note: Beginning in 2016, The gate attendants will now stamp your hand so that
you can leave the track and get back in.  I'm not sure this is available on race

Note: The Speedway now charges for infield parking on Indy 500 race day and
Carb Day.

You can save some walking by taking the trams that run around the infield.
They pick up people who park in the 3rd turn and run up the middle of the
infield and over toward the Tower, and then up to the museum where they
turn around. They also run outside the track to the North 40 parking.  

You may also catch a ride in a courtesy van or golf cart.

Pedicabs are often available too.  These are little carts that hold two people
that are pulled around by a bicycle.  These pedicab guys rely on tips.

Many of the stands that line the outside of the track are generally closed
during practice days in May.

While the infield is very crowded on race day, it is a nice relaxing place to
picnic during other times.  Bring a lawn chair, blanket or gazebo tent if you like.  
Also little children enjoy rolling down the viewing hills.

No infield parking is allowed for the Red Bull Air Race.
This photo shows the crowded Turn 3 infield & viewing hill during the 2008 Indy 500
The stand in the background is the Northeast Vista backstretch
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Turn 3 Infield Viewing Hill during Brickyard 400 not so crowded as Indy 500.
Snake Pit Stage in Turn 3 Party Area - 2015 Indy 500
Riding the People Tram - Better than walking!