So this is set up for a single sensor? Are you running a single or dual exhaust?
Seems to me that, optimally, you'd want it where the two sides meet. Ideally for some setups, you want the sensors closer to where the exhaust exits the engine (at the exhaust ports), but that's not really an option on long-tube headers, as you have to have the sensors where the collector starts.
With only a single though, I'd think you'd want it where the duals become a single.
If that's not an option, with your single unit you'd still want it in the header collector, as close to the beginning as possible. In this orientation, it only reads one side of the engine of course, but at least when everything is working properly, your system should still be reasonably consistent.
Or would it?
To those that really know, does the O2 sensor have to read all 8 cylinders, or is it just reading a ratio? Seems like that's correct, and you can have it read one bank and still keep the engine purring smoothly, but I'm not sure.
Good luck. Interested to hear what others say.
Paul