If your using a standard tank, I would back it off 400-500, as it will lean out as you get down to the bottom or experience any foaming. If your using a bladder type tank getting down to 300 off peak would be about right. Bladder tanks virtually eliminate air and foaming from the equation, allowing you to maintain a similar needle setting throughout the run.

Head temp readings are not the way to go. Its easier to tell if you are rich or lean by listening to the plane in the air, watching for a smoke trail, checking your plug after you land, and checking the exhaust on the bottom of your airplane.

You don't want your motor to lock up during a race, but in racing people tend to try and get that last few rpms out of it and push them too far. How far you want to push yours, is completely up to you. I try to sneak up a good needle setting starting rich in my practice flight, and slowly trying to dial in the perfect setting with each succeeding flight. If your caught in a heat and you think your starting to go lean, you can back the throttle off a little and it should help richen back up and not smoke your motor.