The TPS is a potentiometer, a rotational variable resistor. It receives a voltage from the ignition module (+5 volts) that is applled across the TPS from one end to the other, which is grounded.
As the TPS is activated by the throttle it moves an arn that supplies a variable voltage back to the ignition module as a signal of how far the throttle is open.
You'll need the factory service manual for exact values, but here's a sort of short cut description that may help.
The resistance from one outer pin to the other outer pin of the three pin connector is the total resistance. It should be between 4 - 6 K ohms. You'll need to record this value. ( For example it might be 5.3 K ohms.)
Then you measure the resistance from the center pin to the bottom pin and it should be a percentage of the total resistance. I thnk the number is about 17%, which would be about 901 ohms, based on the 5.3 K ohms previously measured. You need to rotate the TPS until that value is reached. Of course you'll need the 'security Torx' tool to loosen the screw before this is possible. On my 2003 Bandit 1200 the screws are simply Phillips head and don't need that tool.
The ohm figures I mentioned above are just examples and I'm not exactly sure of the percentage values, but the service manual does explain it well.
The TPS supplies a variable voltage back to the ignition module that "tells" the module where the throttle is at any given time. Advancing the throttle tells the module to retard the timing a bit and vice versa.
If positioned incorrectly it tells the module the wrong information and effects the timing AND consequently performance and mileage.
In addition, there are several wires coming from the neutral switch under the left side front sprocket cover. On my Bandit there are four wires -- one grounds the neutral lamp, causing it to light when in neutral. The other three supply a ground on one wire at a time for first, second and third gear selection. This tells the module which "advance curve" to use for ignition advance for that particular gear.
In 4th and 5th gear none of the three wires are grounded, effectively telling the module you're in a 4th or 5th gear. That means that on my Bandit there are four distinct advance curves. I've verified this with a timing light.
This technique of "telling" the ignition module which gear you're in and how much throttle you're applying provides better running and less emissions out the tailpipe. It works well on either carbureted or fuel injected bikes.
My Kawasaki W650 uses the same scheme, although the TPS was adjusted correctly from the factory. The Bandit was way off and adjustment improved running and gas mileage jumped from 34 to 40 MPG.