How much "shake" at idle is acceptable?

It's hard for me to imagine only .490 lift on a [email protected]....
so I went with a 262 advertised which would be about right for a stout .490 lift. which would then be something like a [email protected]
=================
Here is what I would try;
I would;
Prove the TDC mark on the balancer, and prove the ECU knows where TDC is
Set the minimum coolant temp to 180* or so.
Set your hot idle speed to 700@ 10* Idle-advance +/-2*.
Make sure the O2 is in OPEN loop until the coolant temp is within 10 degrees of the stat rating, or like 150*F minimum.
If it won't idle, at 10*, 700, and 180*F; something is wrong; Fix this before moving on.
The problem is probably in the AFR setting, but could be several other things like; a too tight valve lash, tight rings, running too cool, vacuum leaks, a dead cylinder, bad cam, Cam out of time, uneven cylinder pressure, etc. But the point is that if all related things are working , then it will idle ALL day on 10*@700. Assuming a 262 Advertised cam, it will idle all day on less.
Your cold engine will like timing of say 25 to 30 degrees for say 60 to 90 seconds, and if you have an Idle-speed motor, crank it up to 1000rpm, for say 30 seconds, then step it down to eventually land at 700 at say 2 to 3 minutes.The AIS motor must then stay there until the next cold start. With a manual trans, you cannot have it hunting .
Then, as the temp comes up to normal, dial the timing back in steps to also land on 10* by 2.5 to 3.0 minutes.
Keep your eye on the fueling, but if the engine is misfiring, forget what the O2 is telling you, it will be lying.
When the O2 comes on line; Kill the cold-start/warm-up program. Now;
program your Warm-Idle timing to 10*+/-2 @700.Give the ECU some room to let the idle wander, else the AIS will want to make changes, and that would be bad if you are just idling along in first gear.
Program your power-timing to start no sooner than 1000 for the manual trans. This will allow you to dink around the parking lot, up to 8 mph, without getting into the dreaded rocking horse action. Then;
Bring the power-timing in fast to hit 28* by 2800. Then slow it down to hit 34* by 3400. Now road test it.... under power of course.
First; the full-load WOT at 3400 and up. I would use Third gear to give me time to listen, and if you hear or feel detonation, observe when and where and make changes as required, to the power-timing map. If the road speed gets too high with those 3.23s, just use Second gear.
Secondly; to the sub-3400 zone, and I would use Second gear, the gear you will be spending a whole lotta time in, with those 3.23s. Work it from the top down in 400rpm steps, from roll-ons to WOT. Make changes to the Power-Timing as may be required, commensurate with a decent AFR.
I'm gonna go out on a limb and say this timing curve is dead safe on 91gas, so you will not get any detonation. Depending on your cylinder pressure, you may be able to downgrade the gas later.
Now fill in your load maps.
You want about 52 to 56* for steady-state cruising, at ~2600 with your 3.23s which should get you about 65mph.

Now; your 262cam is gonna PowerPeak at around 4800. You can still rev it until the valves float, but I suggest a WOT shift rpm, with the 4-speed, of ~5200 to maybe 5400tops. I highly recommend a rev-limiter for the manual trans.
But; your bottom end from 700 to 2800 is gonna start out a lil sluggish, and this is because I set the Idle-timing to 10* to tame the engine for slow-roadspeed puttering, and freedom from bad low-rpm manners. To get the power back, you simply program the timing back in, step by step, beginning at about 1200.
That's what I would do.....
after I did a compression test to prove I still had an engine to work with, that it had a working cam, and no vacuum leaks not external nor internal. And while the plugs were out, I would regap them to .045 to work with my Big Yellow Square-Top Accell Super Coil, that zaps mosquitoes from a hundred yards away. Well ok, that bit is an exaggeration; but that coil fires anything, and forever. I just pulled out the plugs of my 367,to do a compression test, that were installed in 1999, and have over 100,000 miles on them. The engine was running just fine on them,
but I changed them out anyway....... lol.