It all depends on what you want to do with the Seafoam. Basically, Seafoam cleans out deposits in engines. It was originally designed for marine use, where they can get salt buildup in the engine from all that moist sea air. It was also fount to dissolve carbon buildup that can make your engine run rough. Carbon buildup in the cylinders and spark plugs can cause uneven ignition of the air/fuel mixture, resulting in detonation, pinging or just a rough idle.
You can also get oil sludge in the oil passages, impeding oil flow. You can also get buildup on the fuel injectors, so the fuel isn't atomized properly and lowering power and gas mileage. Seafoam can take care of all these problems.
Normally, you get carbon buildup on the piston heads and the valves. Really bad carbon buildup can stick to the cylinder walls. If the buildup is bad enough, and in the wrong places, it can cause the piston rings and valve seals to wear out. However, since the carbon is still there it will hide these problems. Once the Seafoam clears out the carbon buildup, the hidden problem is now revealed and you need to repair the engine. This causes some people to blame the Seafoam for "breaking" their engine, while it actually just revealed a problem. This is a risk that you must consider while using Seafoam. I would rather know about the problem instead of hiding it, so I use Seafoam periodically on all my cars.
On a Mustang, you can put Seafoam in the engine through the vacuum hose on the fuel pressure regulator. I put some Seafoam in a small jar, one that's shallow enough for the FPR vacuum hose to reach to the bottom. While the engine is running, I disconnect the vacuum hose and let it suck up the Seafoam. Once the jar is empty, I shut the engine off and let it sit for a while. In theory, the longer you wait, the more carbon gets dissolved by the Seafoam.
After 10-60 minutes, start up the car and go for a drive. Depending on how much carbon was dissolved, your exhaust will spew white smoke. This is the dissolved carbon burning off, not the Seafoam. Sometimes I've seen white smoke as soon as I started the engine, sometimes not until I accelerate into traffic. Be sure to floor it at least once to get the carbon moving, don't baby the car at all. If you do not see any smoke after a few minutes of driving, you didn't have much (if any) carbon buildup, so no harm done.
If you put Seafoam in the crankcase, change the oil about 100 miles after putting the Seafoam in. It's a good thing to do just before an oil change. As with carbon buildup on the cylinders, it is possible to get sludge buildup on the bearing surfaces in the engine. Seafoam will dissolve this buildup, and now you have revealed worn bearings and have an engine knock. Again, this is a rare occurrence on a badly abused engine. You will not necessarily notice anything if the Seafoam has done its job and the engine is working fine. You may notice the oil is dirtier when you change it, though. Not sure.
Seafoam in the gas tank will dissolve any buildup in the fuel system, especially on the fuel injectors. It is also a gas stabilizer, so if your car will be sitting for several months you can add Seafoam to the tank to keep the gasoline from separating into its different chemical components. If gas separates like that, it goes "bad". One of those separate chemicals can thicken and varnish the fuel system, causing bad fuel flow. Yet again, Seafoam can reveal bad or broken fuel injectors once the varnish is removed, but in 99.999% of the cases it works just fine.
I don't think there's any obvious sign that Seafoam has cleaned up fuel deposits, except to notice that the engine is running smoother. The exhaust won't smoke because burning Seafoam does not make smoke, and there's usually not enough buildup or varnish dissolved in the fuel system to make any smoke.
*whew* Outta make this one a sticky so I don't have to write that all again.
