I'll chime in with my experience on this. Pirana and I had a little test on which setup would be more beneficial. When we would run the cars, the car with the cold air extension would pull ahead.
The stock ECU retards timing if the intake sensor reads higher intake temperature and thus reducing power output to safeguard against knock.
The sensor is best mounted in a location where it can read the actual air temperature that is going directly into the intake tract.
In theory, it should be mounted near the throttle body, but its not feasible due to boost and it will pop off. If you get a second filter like the AEM dryflow you can poke a hole at the top of the plastic and mount the sensor there.
