They should be installed to point at the stud in "front" of them and in a direction that if a nut loosens, the pointer is pointing towards the tire, not the hub.
Although they could help identify a loose lugnut, I like them for identifying a dragging brake or wheel bearing problem. They melt at (standard WheelChecks) 248'F and the high-temp WC's at, I believe, 450'F. A melted WheelCheck on one side typically identifies either a dragging brake, a brake on the other side not doing it's share of braking, or a wheel bearing that's running hot.
I've discovered a lot of brake issues observing buses pulling in from duty and have seen rear WC's melted while fronts remained intact (front brakes way out of adjustment/not working correctly due to bad slacks or a bad valve) and mid-axle WC's melted with front and rears intact indicating a brake imbalance.
I spec them on all of our equipment. They are just another tool an observant maintenance manager can use to manage his herd and they do give equipment operators a way to identify what should be tight lugnuts.