While the drivers do have a very limited field of vision, they CAN see out of the float - especially during the daytime parade. But even at night, it's almost pitch black inside their cabin, so it's just like being in a dark room in your house and looking out the window. Any ambient light outside, and your eyes adjusting, will allow you to see fairly clearly.
And as Marni said, there is a tracking system that has worked fairly well for many years. They have "pucks" embedded in the parade route. As you walk along the parade path, you will see a series of staggered dots (which look like black chewing gum mashed onto the pavement) every [I forget] feet.
As each float passes over a set of these "pucks" it sends a unique identifier to Parade Contol and tells them if the float is getting too close to the float in front of it, if it's lagging too far behind, and if it's veering off course. Control will then either radio back to the driver (or use a series of indicator lights....I think it changed at one point) to tell the driver to speed up, slow down or veer back left or right.
Jackknifing an entire float seems like it would be quite a challenge. I can only imagine that it happened during a sharp turn of some sort (hub?) and the driver just didn't straighten up in time and got into a bind.
I guess we need photos or an eye-witness account of the incident to know what really happened, since this is clearly just a rumor or guess at this point.