You have 3 kinds of timing events,
1. Initial, what the markers at the crank say
2. Mechanical, what happens after things start turning, this is is the mechanical advance mechanism in the distributor
3. Vacuum, the canister. Once the engine is running, hopefully making some vacuum, this will give the motor the final dose of advance. Some advance cans can be adjusted by using a allen wrench through the nipple where the vac hose goes on.
If you use a ported vacuum source, it will only get the vacuum signal when the throttle blades reach a certain point.
If using manifold vacuum, the distributor will see full vacuum advance basically all the time.
You cannot run excessive amounts of initial, or the starter is going to have a hard time cranking it over, the electrical load among other things will cause hard start.
Not knowing your engine, I would try 10-14 initial, check the mechanical, and this is where some degree of magic comes in, with springs and weights,usually try to get it in by 3000, depends on gears,trans,weight, eventually you will get it, and the vacuum all in total I am only guessing you will want to shoot for 36-40.
Mash the pedal, the vacuum drops out.
Vacuum advance will help gas mileage, mechanical has to be limited to avoid "knock", pre-ignition.

Hope this makes some sense to you.
Another thing, about the surging thing, some MP distributors had a problem with the indexing of the reluctor wheel, and I think under vacuum it played hell with timing.