Talk to your instructor. He may have it set really rich because its a new engine. If you've got a few tanks of fuel through it (assuming its the typical ABC or ABN engine), then you can lean it out further. Peak the RPM with the high speed needle, then richen up until RPM reduces between 200-500 RPM. Then check your transition. A very rich top end can make you thing the low speed setting to too rich, and can cause similar hesitation on throttle up because you're dumping too rich a mixture into the engine.

I always check the high speed needle at the beginning of the day, and then again after the first flight. If the temperature warms up significantly, its cheap and easy to check it again. Invest in a tachometer. It's well worth it. I normally don't have to touch the low speed mixture once I've got the engine tuned.

Some oil out the muffler is good. You don't want the oil coming out to be "burned" or discolored. That indicates the engine is running close to the breakdown point for the oil. A trail of thin white smoke behind your plane is usually an indicator that things are running properly. Depending on the oil content of the fuel, you may be cleaning a lot or a little oil off the plane at the end of the day.

Brad