Timing is the point at which your spark plugs are directed to fire in relation to the compression stroke of the piston. The stock setting of 10* BTDC = "10 degrees Before Top-Dead-Center." So, advancing your timing makes the spark plug fire that much sooner.
The idea is to get the fuel to BURN, rather than EXPLODE - changing timing will change the point of compression at which the fuel begins to ignite and, thus, how it will combust. If you advance timing too much, and you wind up with detonation (pinging), which can damage things and, in extreme cases (such as with forced induction or nitrous) totally kill parts of your engine. (Punching holes in your pistons and fun stuff like that.)
To change it:
1. Buy a simple timing light, clip the power leads onto your battery terminals, and clip the pickup over your #1 cylinder plug wire (the front-most cylinder on the passenger side). Make sure you keep the cables out of the way of the serpentine belt and the radiator fan, or else serious harm (and humiliation) may result.
2. With the engine warmed up to full temp and then shut off, pull the spout connector out. It's a funny little plug thing coming off the wiring harness by your distributor's ignition module. PUT IT IN YOUR POCKET. DO NOT LOSE IT.
3. Clean off your harmonic balancer so that you can clearly read the numbers on it. I always forget this part for some reason, and don't realize it until after I've started the car, then I have to shut it off, crawl under there, and scrub away while feeling like a dummy.

4. It's a good idea to take a marker or chisel or SOMETHING to mark the position of your distributor where it's at, FIRST ... just in case you flub things up. (It happens.) Now, LOOSEN, but DO NOT REMOVE the bolt for your distributor hold-down clamp. It's a 1/2" head bolt, usually. If you don't have A/C, this part's easy; if you've still got the compressor installed, that stupid thing is a PITA to reach.
**DO NOT ROTATE THE DISTRIBUTOR WITH THE ENGINE OFF!** You'll just wind up moving the timing to some unknown position, and you'll hate yourself for it. Don't ask how I know.
5. Start the car. It'll probably stumble and run kinda funny at first. That's because the spout connector is (or should be, at least) sitting in your pocket and not plugged into the harness. The ECM is not able to add or subtract timing at its merry whim, so what you'll be getting here is the BASE TIMING reading.
6. Point the timing gun at that pointer on the passenger-side of the harmonic balancer. Pull the trigger. Unless you've confused your timing gun for your girlfriend's/wife's hairdryer, you will be rewarded with a flashing strobe light that will illuminate the position of your timing, as per the numbered marks on the balancer; otherwise, you will only be rewarded with a whirring noise and a stream of warm air, and your woman will yell at you for getting grease on her hairdryer.

7. Pay close attention to where your timing marker is at BEFORE you do anything. Got it? You sure? Okay. NOW, you may SLOWWWWWWLY start to rotate the distributor. IIRC, counter-clockwise advances timing, and clockwise retards timing. Whatever. You'll see the pointer move when you do it. You won't have to move it very far at all. Usually, there's a mark for 0*, 10*, and 20*, with five marks between each. So, each mark roughly equals 2 degrees. Rotating the dizzy so the pointer goes up two lines (about 1/8") will advance your timing to 14*.
8. Once you have the timing set where you want it, let go of the dizzy and DO NOT TOUCH IT. Go shut off the motor. Tighten the hold-down bolt snugly, but avoid moving the distributor at all. I try to only loosen the dizzy up just enough to where I can baaaaarely rotate it, because if you make it too loose, you can sneeze at that thing and throw off the timing from where you set it when you last looked at it.
9. Plug your spout connector back in. You didn't lose it, did you? No? Good boy. Here's a cookie.

10. Disconnect your timing light, throw your stuff in the trunk, crank 'er up, and go for a spin. Listen closely for any pinging at WOT (sounds like marbles banging around in your motor). If you experience any ping, repeat the above procedure and back the timing down just a hair - half a mark (13*) or down a full mark (12*). Do this until you reach a happy compromise between added power and no pinging.
Most importantly, post back with your results.
