Just saw this post as I am about to set my carb sensor settings as well. My thought is that the sensor is in the throat of the carburetor and therefore, we want to know when the temperature there gets to 0 deg C (32 F) because that is when water freezes. Therefore, I will make my sensor turn yellow at 42 Deg F (10 degrees of warning) and red at 32. We'll see how this works. I have an O-320 as well.