Keep the CHT under 400f (205c). At temperatures over about 425f, the aluminium is in danger of going crystaline, which it always does just before it melts!
This is what the aviation boys use as a limit for VW engines in light aircraft too.
That being said, placing the CHT guage in different places can get different results, and the guages might vary in accuracy too.
The head studs nearest the exhaust port is about the closest you can get to the max-temp portion of the heads.
Spark plug senders tend to give lower readings (plenty of airflow through the fins there).
Rob
Rob and Dave's aircooled VW pages
Repairs and maintenance for the home mechanic
http://www.vw-resource.com