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In general it will depend on what type of 02 sensor you're using. Narrow band sensors don't have heaters so they need to be closer to the exhaust port to maintain the temp needed to be accurate. A wide band 02 sensor can be located farther away (as in the collector) since it has it's own heater element.
It's also preferred to mount them somewhere between straight vertical and 90 degree to prevent condensation for collecting on the elements and fouling them.
I'm using a Mass-Flo system with narrow band sensors and mine are located in one of the primaries on either side of the engine. Not an ideal solution but close enough to keep them hot and give me a reasonably usable reading.
DonC
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