It was on the roof of Terminal One. I have many great childhood memories of that spot. My father used to take me up there every Sunday to watch the planes. At the time, you could park your car right up there. I saw the first 747 ever in Toronto. It was SAS, diverted for some reason. Over the years we saw other great sights, and have lots of pictures as memories. It closed down approx in the late 80's...what a shame. I agree, it was the best spot in the world.
Also there was a restaurant on the top floor of Terminal One, it faced the North/South, East/West runways. It was directly above the departure and arrival gates, so you could get some awesome sights. We would go up there on rainy days or in the winter. What a view. It closed when Air Canada took over Terminal One. The last time I was there was in 1997.