okay, after you set the base timing, the static timing, by turning the engine over by hand so that you line up the mark on the crank pulley with the arrow on the block which puts the #1 piston at TDC. pull the cap off the distributor and look to see that the rotor is pointing towards the spark tower on the cap that corresponds to the #1 cylinder's spark lead. This should put the ignition timing somewhere close to zero.
from this point you would replace the distributor cap and secure it and put a jumper wire into the test connector located up on the firewall close to the coil. this locks out the automatic timing advance supplied by the ecu. you will want to follow the instructions found in the FSM bench repair section.
when you start the car, use a timing light to check the timing mark on the crank pulley and note its position with regard to the pointer on the timing belt cover.
loosen the hold down bolts on the base of the distributor so that you can rotate the position of distributor body. this movement changes the timing of the spark event as related to the TDC position of the #1 piston, either retarding it or advancing it. once again, it is easiest to follow the directions given for setting the spark timing in the FSM.
If, while trying to set the timing, the idle is too low to keep the engine running you would want to tweak the idle air screw (located under that black rubber plug.) Small increments are all that is needed for this.
After each change, re-check the timing mark's position with regard to the mark on the pulley and the mark on the timing belt cover.
The idle air motor I spoke of is located on the back side of the intake manifold. When the engine coolant temperature is low, idle motor should lock into the step that allows air to bypass directly into the manifold making the engine idle at about 2000 rpm. As the coolant warms, the idle air motor will step down to make the engine idle around 1500 rpm. The third step on the idle air motor should make the engine idle around 1000 rpm. After the coolant is fully warmed, the idle air motor should close completely so as to not affect the idle at all. This air motor is not electrical and has no wiring. It only has a coolant line going into and away from the controller.
The IAC is the electrical solenoid located on the front side of the head towards the distributor. It is electrically controlled by the ecu and the a/c controls and its action bumps the idle up a little when an electrical load is sensed by a diode array or when the a/c controls turn the compressor on. It shouldn't have much, if any, effect while the coolant temp is below normal operating temp and the ecu is locked into open loop operation.
After the engine is up to normal operation temp and the idle has stabilized you can make the final adjustment to the idle air screw. As I said, I think that the FSM calls for 850 rpm with the headlights on. I sometimes like to set the idle up around 1000 rpm for a more stable idle, it depends on tuning, cams, etc.
As for that idle air motor on the rear of the intake manifold, they fail, they get dirty, and they can complicate the idle. Sometimes the air motor causes the engine idle to hunt really badly with the idle zooming up and down from 800 rpm to 2000 rpm, back and forth. This is why I removed it from my engine and used a blanking cover and gasket. I don't drive my car in the winter so I really don't need the fast idle feature.
Anyway, your best bet is to follow the step by step directions in the FSM. Make sure that you don't have any vacuum leaks, cracked or loose vacuum hoses or a bad gasket on that idle air motor. Any vacuum leaks will monkey with your idle speed. Also, don't forget to remove the jumper wire from the diagnostic connector after you adjust the spark timing.
