Howdy back All:
To add to Adams info, depending on which manual trans you use you may need a different pilot bushing in the shaft. The 4 cylinder T5 has a smaller diameter input shaft diameter. IT is always best to check.
THe '68 distributor has both centrifugal and vacuum advance. The confusing is that the vacuum canister has both an advance line and a retard. As Adam said, the retard line is the one nearest the distributer, on the inside of the canister. MOst of the '68 & '69 engines have this vacuum arrangement, as well as the earlier Calif Emmissions equiped engines.
THe downside is that while this year 1100 has no SCV and sends a ported vacuum signal to the distributor, it is downsized in flow capacity. It is rated at 156 cfm compared to 185 for previous 200 1100 carbs. If you want the power back, you'll have to upgrade to an 1101 from a '69 Mustang with a 250. that carb is rated at 215 cfm. OR, a Carter YF from a '70s 200.
Adios, David