What temp thermostat did you use?
Mine originally had a 190+ (I think it was actually 193) degree; that was just a little under 1/2 on the gauge.
Then I put in a 160 degree; that was a little too cool and probably 1/5 on the gauge.
I have a 180 degree in there now and it sits around the 1/4 mark.
The original clutch fan would keep it at the thermostat level all of the time. My electric fan will keep it there unless I'm sitting still for more than 15 minutes, then it'll creep up to a little over 1/2 and the fan will come on and cool it back down. As long as it gets to the same level all of the time, you should be fine.
I think that, in general, a cooler engine will have a little more HP, but will be worse on emissions, and causes more wear & tear than a warmer engine. I believe that most engines are designed to run best around 190-200 degrees.