Labor Day weekend of 2010: Fri night into Sat, I'm going to be in Portland.
Probably the best places will be the ones up close: Union Station has a handful of freight movements a day and you can pretty much walk all around it - there are grade crossings at both Naito Parkway and N.W. 9th Avenue; the Eastbank Esplanade crosses the UP owned Steel Bridge right beside the tracks and it'll take you to East Portland, where the UP Graham Line, the lead to Albina Yard, the Steel Bridge, and the old SP Valley Main converge.
Downtown, you have MAX and Streetcar operations. If you ride the Streetcar to its southern terminus you can catch a Willamette Shore Trolley excursion to Lake Oswego on a 1950s era Broadway car operating on the old Oregonian Railway/Portland, Eugene & Eastern/Southern Pacific's Jefferson Street Branch, and one of the two original routes of the Red Electrics out of Portland.
You could take MAX out to Beaverton and Hillsboro and get a glimpse of Portland & Western operations; but WES will not be in operation on a weekend/holiday. However the Oregon Zoo will be open and will likely have all three trains in operation.
TriMet's #17 Holgate bus will get you to UP's (ex-SP) Brooklyn Yard; Holgate passes over the yard at its mid-point, and you can get a glimpse of the roundhouse that is home to the SP 4449, SP&S 700 and the OR&N 197 (a.k.a. UP 3203), plus assorted other pieces of equipment. The #17 bus is a "Frequent Service" bus so they run somewhat frequently (I believe it's now every 20 minutes or so). The #17 bus in the opposite direction ("NW 21st Avenue") will get you to Sauvie's Island on a Saturday which will pass by the Lake and Willbridge Yards, but there are much better places to railfan. You'd almost be better just getting an Amtrak ticket between Portland and Vancouver and return. You can also catch a glimpse of the P&W's A-Line if you head out all the way to Sauvie Island.
UP's Albina Yard can be reached from the Yellow Line MAX at the Albina/Mississippi stop; or you can go up one stop to Overlook Park which gives a great aerial view of the yard and the Fremont Bridge. You could take the Yellow Line to the Vanport station, hop on a C-Tran bus across the river to Vancouver and catch some BNSF action in its downtown area (although there is currently no transit service to the Amtrak station, but if you don't mind a little bit of a walk...) The Fort Vancouver National Historic Site is within walking distance, however, and the BNSF mainline passes along its southern boundary.
The Oregon Pacific Railroad in Milwaukie has a neat collection of equipment, and you can reach it by TriMet's #33 bus (Frequent Service) or #70 bus (does not go downtown but you can catch it at the Rose Quarter Transit Center). The #31, #32 buses will also get you there. The #32 and #33 buses continue to Oregon City where you can watch the UP (ex-SP) mainline pass through the downtown along the bluff; check out the paper mill and its interesting switching track from the top of the Oregon City Elevator (although there are no rail operations during the day), and walk across the Oregon City Bridge and check out the Willamette Falls Lock which has been restored back to operation. There's also a model railroad hobby shop in downtown Oregon City along with an antique store that carries quite a bit of railroad stuff.
Finally, you could take TriMet's #77 bus out to Troutdale and check out the Troutdale historical museum housed in a former UP depot, along with a UP caboose, right next to the UP mainline as it exits the Columbia Gorge and crosses the Sandy River.
If you want to partake in Portland's bicycling culture, the Springwater Trail Corridor is Portland's main attraction and a rails-to-trail, on the old Portland Traction Company interurban line from Portland to Gresham and Boring. About 25 miles one way but it's an easy, nearly grade-less trail. Ride one way, come back on MAX. Or ride the Green line to Lents, ride the trail to Gresham and return on MAX. If you are a bicyclist, there are a lot of other opportunities for you to railfan in the Portland metro area - in the past I would ride from my home in Tigard to Tualatin, catch a WES train to Beaverton and ride back home on the Fanno Creek Greenway.