I have a 2009 Street Glide and I am interested in installing a stage II. My dealer will put in a the HD, 255 cams etc. which will get me into the 80's with torque and HP. there are private mechanics that I trust that say they can get me to 100 on each for a few hundred dollars more. any recommendaitons as to what my concerns should be?

 

Many, many posts on this site on this subject. You need to utilize the search function in order to find out though.
I would ask where you are currently at and what do you have so far?

 

The stage I one was done by the dealership. SE Pro Race Tuner, SE Air Filter, Samson Slip ons, dyna tuned.

The dealership proposes a stage II 1690 package which includes the SE 255 cams. they claim that they can get me into the 80's in both torque and HP.

The shop that the heads would be sent to by the dealership has quoted my a Stage II with different cams, and pistons (non factory) and claims they can get me 100 torque and HP.

while i would like the extra and don't mind paying what would result in about 600.00 extra I do not want to end up with a machine that becomes tempermental and has a voided warranty.

the outside shop does come highly recommended.

 

That sounds reasonable. I would think of going with the Woods or Head Quarter cams myself. I am also looking at this very same thing. I have a buddy that recently went that way. He had the stage II with the 255's and basically said that they have a lot of low end TQ but after that leave a lot to be desired, so he is going with Hillside for the heads and Woods for the cams.
Personally I think that you should just try new cams at this time. If you want to go with 255's there are many on this site for sale now( check the touring classifieds section, at least 3 sets right now) in the $150 dollar range that you could get, and you could try those and if not happy you could always bump up your build. If $ is not really an issue, I would say go for a full stage 3, if it is or you are unsure then take it a step at a time.
As "they" say, "Speed costs, how fast do you want to go"?
Welcome to the site too, there is a wealth of knowledge here..

 

Can you tell me what is the proper procedure the HD mechanic should follow when someone upgrades to the Stage 2?

 

Well you have a 2009 with I am guessing 1 to 1 1/2 years left on the warranty. If you have an outside shop do the work, you will void the warranty on the motor. If HD shop does it make sure that they will warranty it as well. If the outside shop is very reputable then have them sign saying they will warranty their work. I normally don't let dealers work on my bikes, but when I bought my 09 they installed the 103 and it is warrantied and I have that in writing.