From my studies it seems the optimal location is the TB spot. That's for MS installs though. TDR installed my LCD-1 so I have no clue where they used. Wherever it is, it's been fine for years.
I'll be using the TB spot when I get to installing my MS soon though.
Edit to add: IIRC, the TB location is the same place where the ecu is grounded. I think MS wants the same location if you plan to have the ecu actually use the wideband imput. If you are just using the LC-1 as a standalone guage (as mine is currently) then the ground is less critical.
Pretty good writeup on MS page (here's from their FAQ):
''""For the most part you'll follow the 'Quick Start Guide' that comes with the controller to the letter. If you lost that or need a copy of it for some reason you can download it here: LC-1 Quick Start Guide for the LC-1, LC-1/XD-1 Standalone Gauge Kit if you have the combo kit, or MTX-L Manual for the MTX-L.Here is what we'd like to add:
- Ground the controller and the MegaSquirt together. This is to prevent a voltage differential and will ensure accurate readings.
- The factory EFI system's fuel pump relay often makes a good source for 12v switched power. This is a required source for 12v, but often a good one...
- For the LC-1, wire the brown (analog out 2) wire to the MegaSquirt's O2 input wire. For the MTX-L, the default analog outputs are reversed, so you'd wire the yellow (analog out 1) wire to the MegaSquirt's O2 input wire."""
I believe I read somwhere's (likely MT.net) that on a 94 (mine) the ecu ground is the TB spot. I'm figuring that since I'll be plugging the MS into the car's harness, that's where my new ecu will be grounded as well. Not sure if the ecu ground location is model year dependant, but likely so.