You're actually better off placing an IAT as close to the intake manifold as possible, i.e. after the turbo and intercooler. That's where the most accurate data for the air going into the engine can be extracted.
But given the choice between not having an IAT sensor in use at all, or having it hanging in ambient air, I would choose the latter. At least it will get things ballpark and let EGO correction take care of the rest.
And yes, 10sec. Air is air no matter what car it's going into. My neon is closer in tuning characteristics to the motor in discussion than a stock GTP would be. Timing advance relative to stock timing advance will be similar or at least proportionate. If you can tune a forced induction 4-stroke motor, then you can. Whether the motor is a supercharged briggs & stratton or a quad turbo v12, it is tuned the same way. Just the actual variables themselves vary. Which is why I asked about compression.
As far as knock, I agree completely. If I were tuning it, I would put it on a dyno with a close eye on the knock sensor, and if there is a way to log with HPtuners, keep advancing timing as long as power is increasing. If knock happens earlier than power levels out, I would pull 2-3 degrees from whatever portions of the table are causing knock. If the advance ceiling is knock instead of power, I would be pretty surprised anyway because of the fuel. 93 is a whole different story though.