You want a blue flame, and one that is not pushed away from the burner.
Propane can burn when the ratio of propane to air is in the range 2.2-9.6%. Within this range lies the ideal ratio where fuel to air are properly balanced and the fuel burns with a blue flame and the flame temperature is at it's hottest - 3600F/1990C. The blue flame is characteristic of complete combustion - all the fuel is being consumed in the reaction.
The burner will still operate at other, non-ideal ratios within the range above, but combustion will be incomplete, and consequently less efficient. A lean burn is where there is too little oxygen - this is shown by the flames moving away/lifting up from the burner, or maybe even going out. A rich burn is where there is too much oxygen, characterized by larger yellow flames. In both cases, the flames are cooler, and combustion is incomplete since less than 100% of the fuel is being consumed.
Why does incomplete combustion release less energy?
Propane is a hydrocarbon - energy is released by breaking the bonds between hydrogen and carbon atoms and bonding them with oxygen to form CO2 and water. The bonding with oxygen releases more energy than was required to break apart the original bonds. With incomplete combustion, some carbon atoms bond with only one oxygen atom, producing CO - carbon monoxide. As well as the hazard from toxic gas, less energy is released since fewer C-O bonds are made. At even lower efficiencies, the carbon does not bond with any oxygen at all and is visible as soot.