Supposedly the target temp is around 1200 degrees F. Pyrometer location will depend on manufacturer, most are anywhere from 2 to 6 in. away from the exhaust side of the piston.
We all know that a bike 'burns down' from getting to hot or lack of lubrication. EGTs can warn you of a lean condion burn down by illustrating the exhaust temps, kinda like your water temp gauge before your car overheats. On the flip side, too much fuel (running rich) and you aren't getting the max efficiency of the combustion process (unburned fuel left) which would result in lower EGTs.