One of the easiest carb operation/tuning explanations we've had, so I thought I'd put it into the how-to's. Thanks BC!
There are four fuel "circuits" to look at in a Mikuni round slide carb. Check each one in turn, making sure you are properly jetted for temperature and elevation at which you ride.
First circuit- Enrichment circuit (choke).
It's not really a choke, as a choke blocks off part of the intake in the throttle, creating a vacuum that sucks up fuel into the airstream. The throttle enrichment circuit has a plunger on the side of the carb. It is activated in two stages via the lever. When you lift the lever, the plunger rises, letting more fuel in to enrich the fuel via fuel passageways to allow easier starting. If you have a plunger stuck open, that carb will always be flowing more fuel than necessary. (BAD FUEL MILEAGE) If you disassemble the carb and remove the plunger, you will see a neoprene seat on the bottom of the plunger. If the neoprene is really worn or has deep gouges in it, you may need to replace the plunger. About the only other thing that can go wrong is cable adjustment. Adjust the cable so that the lever is loose, and the lever moves slightly before it starts to move the plunger. That ensures that the plunger will bottom all the way into the plunger hole.
Second circuit- idle circuit
The fuel delivered from idle to about 1/4 throttle is delivered by the pilot jet. The air screw controls the amount of air going to an air/fuel mixing chamber, then that emulsified air/fuel is delivered to the crankcase/cylinders to run the engine. Any problems with idle can usually be associated to the pilot jet/air screw circuit. Turning the air screw IN will make the fuel/air ratio richer. Turning the air screw OUT will make the air/fuel mixture leaner. Problems in this circuit usually involve varnish that builds up in the circuit, especially as gasoline evaporates out of the fuel bowls over the summer. Cleaning the passageways and making sure the pilot jet is spotless are key points to keeping this circuit running. Sometimes you can go to a smaller pilot jet to reduce the amount of fuel being delivered at idle and that will help fuel mileage. However, if the sled idles fine and accelerates without hesitation, I wouldn't touch it, you're good to go.
Needle Jet/Jet Needle
Fuel from about 1/4 throttle to 3/4 throttle is metered from the main jet through the needle jet/jet needle. There are different needles with different tapers to add or subtract fuel in this circuit. As you already have indicated, there are five adjustment notches on the end of the needle that allow fine-tuning of this circuit. Lowering the jet needle by moving an E-clip UP on the needle will result in leaner mid-range fuel delivery. It is important to check piston wash/plug color when adjusting the needle jet by doing a mid-range "plug chop" to ensure you are not too lean. Too lean can cause temperatures in the combustion chamber hot enough to melt holes in the pistons. If you drop the needle, you will reduce fuel consumption, especially at mid-range. Just don't drop too much without testing!
Main Jet
At about 3/4 throttle, the jet needle in the needle jet is lifted out of the jet to where it no longer restricts fuel delivery from the main jet. Now the main jet size is the main controller of fuel/air mixture for running the sled. Jetting changes are dependant on temperature and elevation. As air gets colder, it becomes more dense. Dense air contains more air per volume, so more fuel is needed to keep the air/fuel ratio correct. Too lean, you burn holes in the pistons. Too rich, you foul plugs, get lousy fuel mileage, and the sled won't run. Elevation does the same; lower elevations have more air per volume, so you need more fuel. So, if it's warm and you are at higher altitude, jetting sizes will be smaller than if you were lower altitude on a very cold day. Use the manufacturer's jetting charts to determine if you are using the correct jet. Again, if you change jets, test. Do a wide open "plug chop" to determine that you have not gone too small.
Determine the main jet size first, then do the midrange adjusting. That will require pulling the plugs twice; once after a wide open pass, once after a mid-range pass. To do a plug chop, find a long straight stretch with good visibility (meadows work great) and hit the gas. Travel at least 1/4 mile and keeping your hand on the throttle, kill the engine. Stop the sled, then check the plugs. You are looking for a cardboard brown color on the insulator. Black plugs indicate a rich mixture, you can safely jet leaner (smaller) in your existing conditions. White plugs indicate a lean mix; you are close to burning down the engine. You need to jet richer (bigger). After you have the main jet determined, do the same pass at 1/2 throttle. If the plugs are black, drop the needle one notch by raising the E-clip up a notch, recheck. If they are white, raise the needle by lowering the E-clip down a notch. Recheck.
It takes a bit to get things dialed, especially if you are new to an area or have purchased a sled from someone that rides in a different area.