What are normal readings? What is the sensor showing?
The 'normal' reading for the Entity Sensor is around 350 - 550 mG (35 - 55 uT), depending on where you live.
This reading is the magnitude of the 3 magnetic sensor values (X, Y and Z) in the phone.
According to this Wikipedia article, the strength of the magnetic field at the equator is (310 mg) 31uT, and at 50 deg. latitude, it's 580 mG (58uT).

For detecting ghosts, what you are looking for are spikes where there shouldn't be any. A lot of things around the house will cause high EMF readings -- electrical wires, pipes, motors, toys, magnets, etc. If you get high readings, check to see if you are near any of these. If not, try communicating, and see if you get responses by seeing spikes in the readings.
How can I transfer the files from my phone to my computer?
How do I play / Edit the EVP audio files on my Windows computer?
Is there a graphical way to play the EVP audio files on the Phone?
How can I share my EVP's (Soundcloud)?
How do I Calibrate the phone's sensor?
Is this a monthly charge? Are Updates Free?
Problems with Android Market download? Questions about Android Market