Indexing the distributor means to tweak it so when the reluctor and the magnet in the distrubutor are aligned to fire the spark, the rotor is pointing at the terminal in the cap. Every one of the new MP electronic dists I've seen was off. The same principle would apply for a points distributor too.

It really does make a difference

I used to have a write up with more details, not sure if I can find it again though. If I do I'll post the link.