If it really is an advance dizzy, setting the timing depends on where it's connected. If it hooks directly to the manifold vacuum, set the timing with the vacuum disconnect, and ignore the fact that it jumps way up at idle. If it doesn't ping, don't retard it. When you hit the gas, the vacuum advance will back off and actually retard the timing -- to where it needs to be. If you set the timing with the vacuum connected, it'll go WAY retarded when you try to accelerate, giving you a nasty bog.

If it's hooked to a port outboard of the throttle plates (Weber downdrafts have a port there, for instance), the vacuum advance is basically inop at idle and it doesn't matter whether you time it connected or not. It cannot contribute to bogging in that case; it can only quicken the advance curve (which may or may not be a good thing).

Most vacuum dizzies on the old Volvos are retard units, which the consensus seems to be are best left disconnected.