The Dynojet kit is actually $60 at the Iron Pony and it is well worth the money spentif for nothing else than the needle alone. Change out the parts follow the directions bada bing youre running like a raped ape.
Needle shape and length does make a big difference when you're trying to increase power and uncork the bike.
like I said before, read read read. Research the shit out of it and the answers will become apparent as to which way to go. Asking a bunch of guys who have never wrenched on that particular bike is a start but it's definitely not an answer.
Another route is to contact XRsonly.com. Talk to Chris and he will tell you exactly what you need to do to uncork that bike. Also, Adventure rider has an entire section devoted to the XR 650. Go search your questions over there as they've all been answered on that forum