When using the Bosch 009 distributor (no vacuum) then ALL VW engines must be set at 28-32 degrees at 3000+rpm for the bugs, and 28-30 degrees for the buses.
009s vary (cheap build) and the max advance is more important than the idle advance, so it must be set at 3000+rpm.
Once you've done that - if you prefer static timing you can measure the idle (or static) timing for THAT 009 and use it on THAT engine to set the timing in future.
I will probably be somewhere between 5 and 10BTDC (009s vary - remember).
As others have said, the 5ATDC setting were never used in Aus - only on double vacuum distributors in the US market.
Use as much of the 28-30 as you can without the engine pinging/detonating. If it still detonates at 28, don't go lower or the engine will be underadvanced at higher rpm and run hotter than it needs to - if it still pings at 28 degrees, use a higher octane fuel.
Your engine SHOULD run on normal unleaded if it has stock compression and reasonable jetting in the carbs. High compression or lean running needs a higher octane fuel to prevent detonation with the higher heat.
But if it pings on unleaded - use unbleaded premium, or even BP Ultimate/Shell Optimax/Mobil synergy8000 if it still pings.
Rob
Rob and Dave's aircooled VW pages
Repairs and maintenance for the home mechanic
http://www.vw-resource.com