The needle hangs in a hole in the throttle slide. The clip prevents the needle from falling all the way through the throttle slide. As such, the position of the clip determines how far down the bottom of the needle hangs.
The tip of the throttle needle fits into another carburetor part called the needle jet. When the carburetor is in operation, air flowing through the venturi sucks fuel from the carburetor bowl up through the needle jet and into the venturi. The tip of the throttle needle hangs in the needle jet, and controls how much fuel comes through.
Changing needle position
There are notches near the top of the throttle needle, and the clip can be placed in different notches to change its position. The needle can be positioned to hang lower by moving the clip on the needle to a higher notch. If the tip of the needle is hanging higher, it allows more fuel through the needle jet, and makes the fuel-air mixture richer. You can make the needle hang higher by moving the clip on the needle to a lower notch.
Throttle needles can also have different degrees of taper. The degree of taper on different parts of the throttle needle controls the richness of the mixture at different parts of the throttle range. For a more in-depth explanation of how needles and jets affect mixture at different throttle ranges, please see the diagrams in the carburetor article.
Almost all performance carburetors for motorcycles use slide style carburetors with needles for fuel metering. The dellorto SHA doesn't, and isn't viewed as a performance carburetor as much as a 'stock style' carburetor.