The reason that timing must be "advanced" is to give the flame in the cylinder time to form and fill the combustion chamber thus burning the fuel and providing energy., etc., etc.
Let me explain.
The position of a piston is related to when it is at the very top of its travel or stroke in the cylinder - ie. this is directly related to the position of the crankshaft. The top-most positon is called TDC or Top Dead Centre (oops - Center for you who rebelled against the Crown). The positon of the piston is then expressed as XX degrees of crankshaft rotation Before (BTDC) or After (ATDC) Top Dead Centre.
Now, when the fuel and air mixture gets into the cylinder and is compressed by the piston moving up - it is ignited by the spark plug. It is necessary that this event occur BEFORE (ie. in advance of) the piston arrives at the top of its stroke so that the combustion process has time to get going and the maximum pressure rise has a chance to occur so that when the piston crosses over TDC and begins to go down on the power stoke it has lots of "push" behind it to provide power.
If the combustion process occurs too late (timing retarded) the pressure rise is decreased and power drops. One benefit of retarded timing is that the engine is easier to start and doesn't kick back (all you old Harley riders will know about this).
If it occurs too early (too much advanced) the pressure rises too soon and the piston has to actually fight the burning mixture to get over TDC. This causes a knocking sound and can wreck the piston very quickly. It is commonly called pre-ignition (ie. early-ignition). The action of octane in high test fuel is to decrease the tendency for early ignition and allow higher compression which results in a better pressure rise and more power.
The reason that the amount of advance has to vary (you may have heard of the advance curve on the distributor) is that the time (number of milli-seconds, not crankshaft rotation) for the combustion process stays the same even if the engine is turning faster. Thus, in order to get the combustion process to the right stage at TDC you must start it "earlier" (ie. more advanced) in the upward stroke of the piston at higher speeds.
There are several other things going on here as well - for instance at higher throttle openings the amount of advance changes and this is why you need "vacuum" advance (vacuum is a function of throttle position). Also, different fuels have different flame speeds and thus require different advance characteristics. Anyway - you get the idea.
Incidentally - a diesel engine doesn't have spark plugs since the combustion process is initiated by the actual spraying-in of the fuel into a "dry" cylinder. It is called an auto-ignition or compression ignition engine for this reason. The spray has to be timed just like the spark in a "gas" engine in order that the combustion process occurs correctly. This is also why diesels have such high compression ratios (16:1 and up) - to provide enough compression to heat the air so that when the fuel arrives - the mixture will self-ignite.
I believe that the fuel injection pump on a diesel has advance characteristics that are similar to those on a "gas" engine. The proper name for a traditional gas engine is Otto cycle, by the way. The diesel engine was developed by Rudolf Diesel in the late 19th century and was originally used for large stationary power plants. His original plan was to use coal dust in them but he couldn't work out a way to reliably blow coal dust into the cylinders and so he switched to heavy oil.
Another aside - the efficiency of an engine (any type including gas turbines or jet engines) is directly related to the compression ratio. This is why diesels are inherently more efficient than Otto cycle engines.
Now to your car - the 8 degrees means that the spark is "timed" to occur when the crankshaft is at a positon 8 degrees before TDC which puts the piston just below the top of its stroke. This position is likely the "static" timing positon when the enigne is either not running or just idling. The advance mechanisms on the engine automatically look after the moving of the psotion of the spark to other values at higher engine speed but they need this postion ot be correct as a starting point. If you advance your engine this will mean more than 8 degrees.
At this point I have to turn it over to one of our computer experts since I have never had to mess around with my timing or ECM at all. Over to you Tin Man.
From: Peter Frise
OK Peter, the ECM's main function in life is to advance ignition timing (it can't retard) and set the width of the injector pulses for metering the right amount of fuel. It does a few other things, but these two are its prime functions. Setting the distributor to the prescribed base timing (initial) is done by rotating the distributor by hand using a timing light. It should never need to be reset. From there the ECM will avvance the timing electronically depending on engine demands. If, say, you set initial timing 4 degrees more than spec (12 instead of 8), the ECM will not compensate for this. It will merely dial in the programed advance and total advance will be "advanced" the additional 4 degrees. BTW, to set initial timing, you MUST put the ECM into diagnostic mode. This means the ECM provides zero advance so you can use your timing light to set base. This is done by shorting pins A & B together on the ALDL connector. Some engines that ping may have to have thier base timing retarded until the ping goes away, however performance will suffer and engine temps will rise.
Oh, yes, if you're using one of the older style lights, you can plug the high tension lead into the distributor cap instead of at the plug. Another point on timing lights, if you have one of the newer ones that has a knob to delay the flash, ALWAYS check where the dial is set. I usually check timing with the dial set at zero and then turn the knob so the mark lines up with TDC (0 degrees) and read the setting on the dial. The two readings should agree. HOWEVER, if you leave the dial set advanced, the next time you go to time an engine, the timing mark will be off by whats on the dial. I've done it.
From: Tin Man
On the DIS system, you cannot set the base timing by rotating the distributor because there is no distributor. You cannot set it, period. My scan tool (Diacom) displays wild advances like 30 degrees or 50 degrees. I have been told that these numbers have some magical offset included in them, and this offset is supposed to be printed on the VECI label. No matter how much I study my VECI label, I cannot find it there, it only says no adjustments can be made.
From: Alve Jukka
It's the same for both the Manual and Automatic: 8 degrees BTDC.
The whole procedure is really simple, and should take you less than 15 minutes.
If the timing was way out (> 4 degrees or so), you might want to do a recalibration.
From: Bill Salina