Burt, not trying to step on your toes since you are one of the tech guru's here, but this is from the research I've done on Westhold's website (the transponder manufacturer) and from talking to their people a couple of times in preparation for running Timing & scoring this year
1. There are 2 blinking lights at one end - these should be positioned facing the rear of your bike.
Orientation of the lights on the transponder (i.e. lights facing forward or backward) is not important in signal strength. I would recommend that you mount it so that it is easy for yourself and any track worker to see the lights. There are times when the internal battery will run down before the weekend is over, or the tower is getting a week signal from the transponder unit. Being able to see the lights easily will help you or a track worker determine if your transponder needs to be exchanged.
2. There is a slight, indented channel down the length of the bottom of the transmitter - this should be positioned so it is facing the ground (aims the antenna toward the ground).
This is what people have been told for a very long time, and I'm not going to tell anyone differently, but according to information that was sent to me by Westhold, the LABEL should face the ground. I recently did a test with this at Gateway with a racer at speed during practice sessions who happened to have a bag mounted on his fender allowing easy flipping of the unit between sessions. There was a SLIGHT increase in signal strength when the transponder was orientated label to the ground, but this was on the first day of the weekend, so battery strength was good. I don't think it makes a huge difference if the label or channel is pointed towards the ground. I personally have the bracket on my FZR 400 attached to the stock subframe in a fashion that orientates the transponder label down, and apparently was getting good signals.
They do also caution against "recessing" the unit between two metallic objects (i.e. between or above dual exhaust canisters) as this narrows the signal that gets transmitted towards the ground. I personally know someone that has his unit mounted in his tail, above his stock exhaust cans that consistently gets weak hits and signal strength on the timing system.
I have the "Rechargeable Transponder Manual" as a .pdf that Westhold sent me saved on my computer if anyone wants it.
SO - in summary, the transponder cant be mounted forward of the rear axle. Mount it flat, preferably label down (according to the manufacturer), but channel down works fine also. No carbon fiber between the transponder and the track, and keep the amount of metal between the transponder and the track to a minimum. Don't box the unit in-between metal either, as this creates a weak, narrow signal.