Dale, over at Holeshot, recommends staying away from the K&N replacement filters for the 2G B6/12 and recommends the OEM paper filters.
Our extensive testing has found that the original Suzuki air filter element outperforms other high flow units in the new style air box of the 2000+ Bandit 600 and the 2001+ Bandit 1200.
We recommend using only this filter with the Holeshot Performance jet kits. We now have them in stock for our customers.
Since he's a K&N dealer, that says something isn't right with this particular application. (He does recommend them for the 1G bikes with a Stage I jet kit - just not the 2G.) For some reason, these filters cause rough spots Dale hasn't been able to figure out how to tune out, even with his jet kits (which would be normally be required when upgrading to the higher flowing K&N filters). You can go with the pods on the 2G's though.
OTOH, I've heard of folks running the K&N replacement with Ivan's jet kit in B12's and not having the problems Dale speaks of.