I tend to wear mine pinned to my hat. It makes it nice and visible, and as a result I don't get the confetti dumped on me. After the carnival is over, I tend to leave the badge in place, assuming it's not too awkwardly shaped (last year's really didn't work as a hat badge), replacing it the following year.
Last night, before the Ed Byrne gig, we went to Wagamama in St Andrew's Street. For those unfamiliar with the chain, it's a Japanese-style noodle bar (with flavours cranked up to western levels), where the clientèle sit on benches at long tables. I hung my coat and hat on the cable protecting the window while enjoying my chilli beef ramen.
A little while later, the two lasses who'd been sitting next to us got up to go, and as one of them was fiddling in the general vicinity of my stuff, getting her own coat and scarf, she suddenly squealed. She recognised my plakette for what it was, but didn't recognise the issue (the design changes each year). She herself had a previous year's one on her coat.
(This was before aardvark179 and mobbsy wandered in.)
Oh yes, Ed Byrne was great.