BACKGROUND: We find it extremely useful to use a temp gun on the engine. When breaking the engine in, it is very easy to over heat the engine and cause problems. This will show if you need baffling or larger inlet or outlet areas in the cowl. Your target is to keep the hottest area of the engine under 200F. If you see 220F, it is too warm, and some changes should be made. If it is over 250 (I have been up to 300F), you have serious problems and you need to do something right away. A very cool engine is in the 140F to 160F range.

WHERE TO CHECK: You want to check the hottest part of the engine. This is located on the side of the engine, between the top couple cooling fins. Of course the combustion chamber is the hottest part, and the side of the engine is usually the hottest part. Feel free to check around, some people check the temp next to the spark plug.

WHEN TO CHECK: Right after the plane lands. Be ready with the temp gun and as soon as you shut it off, do the check. You would be best off performing an upline at full throttle just before landing because that will increase the temperature to near its maximum. I found that the maneuver which makes the engine the hottest (since I seized 2 engines with this maneuver, I ought to know) is a full throttle flat or knife edge spin. There is virtually no airflow into the cowl during those maneuvers.

WHAT TO DO IF THE ENGINE IS OVER 200F: While up to 220F is acceptable if you can, it is best to get the temperature below 200F. There are several things that make an engine hot. Any one of them can get the temperature to 300F, but without some experience, you will have a hard time determining why the engine is hot. You will have to do trial and error to learn what needs to be done with your plane. Possible causes are:

1) Needle valve(s) are too lean. This is easy to test, just richen a little but not so much that it is blubbering rich. Over-richening the engine to compensate for other problems is NOT the way to go. You will stick the rings and foul the plug and everyone at the field will come up to you and tell you your engine is too rich. :) BUT, that could be the issue.
2) The engine is new. There is excessive friction in every moving part of the engine when it is new. Don't run it at full throttle, or for more than 10 minutes at a time. Check it after each flight because you are probably leaning the engine after each of the first 5 flights or so, and if you lean it too much, you can catch it right away before there is any damage.
3) The inlet or the outlets are too small. Most of the time there's not much you can do about the inlets, but the outlets can change. Also, if the air is very hot in the cowl due to lack of airflow, the engine is sucking hot air into the carb which robs power like you can't believe. If you can get cool air to the carb somehow, or just fly in Chicago in the winter, then the engine will produce a lot more power. Rear carbs like the DA-50 and DA-85 are really tough to get cool air to. The best is to keep the hot air exit large. The exit is supposed to be 2.5 times the inlet, but I'd like to see you do that with a Yak. 
4) You need baffles. Even a Yak benefits from baffles. Seems crazy, but if you close off the front of the cowl except for the area in front of the cylinder, you will keep the engine far cooler. Since only a limited amount of air is going out of the cowl, then obviosly only a limited amount of air is coming in, and you want every bit of air possible going over the cylinder. Gluing in some balsa or lite ply using glass cloth to direct the air over the cylinder is best.
5) The prop is too big. You need a tachometer. Check the rpm. If it is too low, use a smaller prop. A DA-50 has the best performance in an aerobatic plane with a 23x8. If you use a 22x8, you lose performance but the engine is cooler because the engine spins at a higher rpm.
6) The exhaust is too restrictive. If you cut down the header or cram a muffler into a small area and the flow is restricted, the temperatures will soar and your rpm will suck. If you try a smaller prop and still can't get the rpm up, your muffler sucks. Get a different design if possible. You may have to live with it. Blame the problem on the airplane manufacturer because they should have tested for this when they designed the plane in the first place. This is more of a problem with scale planes which used inline engines in full scale (P-51s, P-40s, etc), so you may have an issue that you can't get around too easily.
7) Ignition timing is off. If the timing is advanced too far, it will pre-ignite and overheat.
8) You are doing a lot of 3D where the airflow is low because the speed of the plane is low, yet the engine is at high rpm. This happens when a heavy plane is torque rolling because it is at high rpm. In this case, use a smaller propeller if you are overheating.
9) Not enough or the wrong type of oil. Check with the manufacturer for their recommendation. I like Pennzoil air cooled oil at 40:1.

Remember that the engine makes the most power right before it blows up. :)