I just attended a local Mustang show and the guys from Pony Carburetors were there. The president of the company tuned the carbs on 5-6 Mustangs as they sat there on the show grounds and with spectators watching over his shoulder. I've never seen anything like it at a show and it was actually a great marketing tactic. I'll certainly give them a lot of consideration before buying a rebuilt carb from a chain parts store.
Anyway, a few things I can pass on from their demonstrations.
1. On small block Fords if the distributor is on the right tooth and the timing is correct the vacuum advance nipple will point to the 7 o'clock position (12 o'clock being the firewall and 6 o'clock being the center of the radiator) That being said don't point it there if it means your engine runs terribly. You're probably a tooth off and so this distributor position won't apply.
2. As Broncobowsher said, don't hold much faith in a timing light. Tune by ear and a vacuum gauge. If you rely on the timing light and the harmonic balancer outer ring has slipped (very common on older engines) then you'll drive yourself nuts because you'll insist the timing is right when it isn't.
To set timing first hook up a vacuum gauge to manifold vacuum and note the reading. As the engine warms up the vacuum will increase slightly and stabilize. Now turn the distributor (slowly) until you maximize vacuum and RPM.
Next, move on to the fuel mixture on the carb. Again, turn in slow increments until you maximize vacuum and RPM. Turn the screw in until the vacuum/RPM starts to drop and then back off just a touch. Most carbs have 1 screw on each side. They should be close to matching each other. (ie. both out 1.5 turns, not one out 2 turns and one out 1 turn)