There is really no "have to" way that the distributor needs to be oriented, it is up to you. Personally, I pointed TDC #1 with the rotor pointing right at the firewall. That way TDC was parallel to the engine. Made it easier to set.
HEre is a general procedure:
1) Pull #1 spark plug out.
2) Start to rotate the engine by hand. You have to look inside the cylinder and see if you can see the intake valve opening. You should be able to just see it at maximum lift. Use a flashlight to help. Once you see the intake valve close continue to rotate the engine by hand (using the crank) until it goes all the way up and appears to stop moving before it comes down. That is TDC. Make a mark on the crank.
3) Now look where your rotor is pointing. That is where if you put the distributor cap back on that #1 wire should be located to be TDC.
4) Now advance that position a little. Put the cap back on, and make sure the wires are on in the correct way.
If you are 180* out, a quick way to test is to take your distributor cap and rotate it 180* and put it back on the distributor.
Good luck.
Slade