The preferred sight picture is sometimes called "equal height, equal light".
So the top of the front sight is to be level with the top of the rear sight, and that will line all 3 dots up. And the amount of light on each side of the front sight, as seen through the notch in the rear sight, is to be the same on both sides.
And as to where to put the front sight on the target image, the answer is "it depends". Using the same gun, it depends on the trajectory of the bullet and the range to the target. The best sight picture at 10 yards will place the holes differently at 25 yards, and so on.
For you, with your pistol, with your ammunition, at your favorite distance, there is one answer. I encourage you to get out the range and shoot until you have found that answer.
And welcome to The Firing Line!
Bart Noir
Who certainly does like those Beretta 92 pistols.