Hmm how easy is this changing the needles??
Pretty easy! You can change the needles without taking the carbs off the bike. The following pics show 2G carbs, off the bike.
Remove the cap of the top of the carb.
Make sure you don't loose the little o-ring (not sure if the 1G has these, but the 2G does and you NEED them, if your carbs came with them).
(Diaphragm/slide shown removed for clarity)
Remove the diaphragm/slide assy from the carb body.
Then pull the cap off the needle. (The gray part in the needle pic posted earlier.) The needle can then be dumped out of the slide.
Stock needles on US market bikes have only one clip groove, so the only way to adjust them is up, with washers. Some other markets, as well as all aftermarket needles have multiple grooves, so the needles can be adjusted up and down.
What does it do, and how can you tell what their set at?
Assuming your main jets are correct, select best needle clip position to get the best power at full throttle / 5k-7k rpm.
If the engine pulls better or is smoother at full throttle/5k-7k in a full throttle roll-on starting at <3k when cool but soft and/or rough when at full operating temperature, it is too rich in the midrange and the needle should be lowered.
If the engine pulls better when fully warmed up but still not great between 5k-7k, try raising the needle to richen 5k-7k.
If the engine pulls equally well between 5k-7k when cooler as compared to fully warmed up, the needle height is probably properly set.
Also when Jet2 is done, they test it using a Dyno, is this necessary when messing wit the needles?
Not everyone adjusts jetting with a dyno, and if whoever did yours installed the kit with a dyno, it shouldn't be honked up now. You can adjust jetting by seat of the pants - which is how everyone did it before dynos became relatively commonplace.
Check out this link for carb tuning:
http://www.factorypro.com/tech/carbtune,CV,high_rpm_engines.html