2- On a dirt bike put the rider on the bike in full gear (yes, I know the guy in the picture isn't wearing his) and have them stand on the pegs. The reason for standing is simple - it is consistent. Seats on dirt bikes are very long. If the rider sits on the seat in different locations it will throw the number off.
On a road bike the procedure is the same except the rider should be in standard riding postion - not standing. The reason for this is the position of the footpegs on a street bike can be all over the place, forward or back of the center of gravity.
The best way to balance the bike is to have the rider grab onto something. It is much easier for the rider to balance the bike by himself rather than fight for balance with the person holding the bike.
Compress the rear suspension slightly and SLOWLY release back up.