The further apart the two units are, the better ( as a general rule ).
The rear sight 'hole' should be aligned with the target ( easier if the target is one of the black bullseye types, as it will sit comfortably in the middle of the picture ).
The foresight element might be a standard post or post and bead - which should be aligned centrally with the rear 'hole' and centrally with the target ( higher or lower to compensate for ranges etc ). The foresight element might also be another, smaller circle type. In this case align rear and foresight as before but centralise the fore sight circle evenly around the target.
Hope that reads well...
Craig
Put on heading 270, assume attack formation