It goes to the clutch hand lever on one end, and the clutch crankcase lever arm on the other ;).
I've routed it a few different ways, and it hasn't seemed to matter. It should go in front of the bars, down along the steering neck on the right side, down between the radiator and the frame, then into the little socket mounting point on the crank case. When you pull the clutch, the lever arm should swing through 90 degrees to the cable, that gives you the best leverage and best clutch pull.
If it stops short of 90 degrees to the cable, you need to add a shim (factory part, or use a washer the right size) to the clutch pusher post. That requires pulling the outer clutch cover, not a big deal, but you may need a new gasket if the old one sticks to both sides.
It's a 220, and they have a reputation of weak factory pistons, so you would be strongly encouraged to pop off the jug and head as a unit (not a big deal... remove spark plug boot, coolant lines, a few KIPS bits, and a few bolts). Avoid disturbing the head to jug seal, so you don't risk head gasket leaks. Then just lift the whole jug and head assembly off the piston. You can then check the bore and the piston skirt.
I have a 200 piston here on my desk with a cracked stock skirt, and I have a friends 220 in my garage that the previous owner spent good money to put a new steel sleeve in, and replace half a crank case, because his stock 220 piston exploded within three months of when he originally bought the bike.
This isn't a slam on the 220 or to say you bought a bad bike. It's a used two stroke with an unknown history... so you should expect to replace the piston with a good new replacement (forged is more expensive and will last longer, cast is fine also, but you will want to replace it sooner). If you pull it apart and find it perfect, or if it looks like a nice forged Wiesco in good shape, you can decide if you want to risk riding and checking every winter.
If you are coming from a four stroke and reading this... DON'T PANIC! Two years ago I finished rebuilding rebuilding a KLR-250 four stroke (starved it for oil and spun a cam in the head), and reading my suggestions above would have had me pretty depressed. When I went to check the piston on my "new to me" two stroke, and saw how easy it was, I literally laughed out loud. :nener:
Welcome to the forum! You picked a GREAT bike!