Replacing the stock air filter with a K&N replacement filter is an easy process - just replace one filter for another higher flowing filter. As DfgPilot indicated above, this will make the bike run leaner than before so you need to add an after market digital fuel processor.
Replacing the stock intake with an aftermarket air kit (e.g., Thundar airkit ,Barron's big air kit (BAK), air kits form Sherms Performance Products, etc) is more involved but will provide a much higher air flow => more power. The stock air flow patterm as I understand it is as follows: Air is drawn under the fuel tank and enter the left side air cover and enter the right side (where the throttle is located) via the cross over tube. Aftermarket air kits basically allow the bike to breath better by drawing air directly from the right side with less restriction. Since most FI bikes do not compensate for a large increase in air flow from aftermarket air kits, the bike also needs an aftermaket digital fuel processor to ensure correct air-to-fuel ratio. Installing an aftermarket air kit w/o an aftermarket digital fuel processor will make the bike too lean which will cause engine to run much hotter than it should.
Installing an aftermarkter air kit will require you to :
1. remove the left air intake and the crossover tube;
2. remove or relocate the ICS (Idle control Solenoid);
3. Disabling the air valves (air used to combsut excess hydrocarbon at the exhuast ) and possibly adding coasters; and
4. for californa models, remove the Evaporative Emission Control since the aftermarket air kits do not provide a means for attaching the fumes from the carbon canisters like the stock air box.
Most people also replace the stock exhaust pipe when they are replacing the stock air intake system to add additioanl power.
I don't know how much power and torque you gain by using an aftermarket intake, exhaust, and FI processor but you definelty feel the difference in power to make all the time, money and effor spent on doing the replacment worth while.
Paul