Live in RI and have been to the Festival a couple times. If the weather is nice, it's absolutely spectacular! Right on the ocean at Fort Adams...boats in the water, sparkling water, beautiful breezes. If the weather is bad (rain, HOT, etc), it can be a miserable experience. There is no respite from the elements (sun, rain, etc).
Newport in the summer can be an amazingly beautiful place. Make sure you plan on spending a day or so in Providence while you're here too. The city has a lot to offer...great restaurants, history, along with a lot of cultural events (if you can, plan on catching a WaterFire...if you haven't heard of it, do yourself a favor and Google it!).
Feel free to hit me up if you have any other questions!