Howdy TitlistI6 and all:
If indeed you bought a '68 Autolite 1100, the good news is that it has no SCV and is compatible with the '68 distributor. The bad news is the venturi is necked down to a 1.1" diameter, reducing CFM from 185 to 150- Not good for performance!
Your shop manual has some good photos of the 1100 carb in section 10.
The areas to check on the distributor are the tightness of the shaft, free moving advance plates and weights and pivot pins, good springs, and the distributor gear. All can be cleaned, rebuilt and refreshed, but if the shaft is loose in the housing it is usually cheaper to get a new/rebuild distributor. Springs, pivot posts, pivot plates, and weights can be cleaned and rebuilt/replaced. The springs should be replaced because, even if they look good, after years of heating cycles and stretch cycles they are likely fatigued.
Check the shaft for tightness by holding the housing in one hand and the shaft at the top and then the bottom with the other hand and try to move the shaft back and forth. If there is a noticeabe amount of play or if the shaft does not turn freely in the housing, it is best to replace it.
A badly worn gear at the bottom of the shaft is also an indication for replacement. If the shaft is solid and turns freely in the housing, just thoroughly clean and lube it and replace any internal parts that appear worns.
If you're replacing at the parts store ask for a distributor from a '68 Mustang with a 200 manual trans/vacuum advance only- no vacuum retard. Check the new distributor with the same thoroughness and detail as you did the old one. Just because you just paid good money for it does not ensure that it is good. Check it over.
Adios, David