There should be a diagnostics plug near the air flow meter (or attached to the wiring loom near where the wires connecting to the AFM is). Open the lid and you will see a number of points to connect a multimeter or other diagnostics tool to see what is going on with the ECU etc. This is where you connect the E1 and TE1 (use a paper clip or something). You can see what pins are what as they are printed on the inside of the lid of the diagnostics plug. If your car was wired up properly, you should hear the idle change slightly when you first connect these pins. Go to the website I posted on my earlier reply for more info on the engine (check out the other chapters too).
I've used 10deg BTDC and I run Optimax (98RON) but I must admit, it can occaisionly knock when taking off on a really steep hill if I don't get the revs right (lazy in traffic, etc.) but mostly its fine. Perhaps setting it at 8deg may be better as Mr Revhead suggests, but certainly 0deg is too far retarded.
If you don't get the idle to change when you bridge TE1 and E1, you may not have the diagnostics plug wired in properly. If you're keen, you could temporarily connect them at the ECU plug (but make sure you confirm what pins these are at the ECU - remove the ECU lid and check against what's written on the ECU printed circuit board).