timing chain question

I am at the point now to install my timing chain and need some advise. The cam sprocket has 3 key ways A. O. and R. Can you tell me what would be the advantages to advance,. on center or retard? Why would you retard the valves? My son in law installed his 350 chevy at -O- with 12 to 1 pistons and it runs on pump gas and he said for me to do it also, but I have heard that advancing really makes a differance in performance. I have comp xe268 H cam , flat tops +(pos) decked, X heads. Any advise will be appreciated. thanks Walt :thumbup: