setting timing on a 98 FE 600

I have been tinkering with the timing this afternoon. With the timing light and at idle the timing was about an 1/8 inch above the mark. I removed the flywheel and moved the stator about 1/8 and the timing light now shows it hiting the mark. The problem is that the idle is a bit erratic and the timing mark bounces around a bit on the flywheel When I hit the throttle it smoothes out but the mark on the flywheel falls 1/8 lower than the mark on the housing. I have a sparks stator, checked TDC (it lines up with the mark on the engine), carb seems fine. It starts on the button pretty well but I notice I have to crack the throttle a bit and it will fire right up.
My question is, do I set the timing at idle or do I set it for after idle?

Thanks Husabutt,
I have already looked thru those posts it didnt seem to tell me much.

Thanks guys.
The stator is from sparks and did not come back with a centering hole. I am just trying to get it set right before I drill the hole in the new stator.

There is no sight hole in the cover.

Ned wrote:
"the stator has a groove at the bottom of the stator right in the middle of the lower vane. if its covered by red goop, just measure where the center would be and file a deep line. the hole is in the flywheel. here's a pic that should help. and iirc, the screws are fairly well centered in the stator slots."

Thanks Ned,
I am aware of the notch in the stator, as mentioned mine is covered up. My thought was to set the timing exactly with a timing light and then take a small drill bit and mark the stator with the flywheel in place. Right now I am moving the stator back and forth to see if that little bit of play in the stator slots makes a difference. My whole question here was if anybody used a timing light on theses older 600's and if so where did they set the timing according to the mark on the engine.

Taffy! Go to bed! It's late!