Original Vs Performance

Just recently took my VTR to the Bike shop for a Major going over. New Qualifiers, New Camchains and Tensioners, New Oil, Filter, Coolant, Fluids, Brake Pads and discs.... And we came to the question of an air filter. I asked about K&N air filters and was told that they made the VTR run very erratic, and often required a dyno tuning to get to run smoothly. My question is, apart from bragging rights, whats the benefits of performance parts, opposed to stock standard ones? Does the average rider require these mods? And secondly, Could someone dispel some of the hype about dnyo tuning? Is there any notable difference in the bikes performance for dyno tuning it. What is stage 1, 2 and 3 dyno jetting / tuning all about?