Your spark plugs fire earlier in the power stroke, actually slightly before the compression stroke is fully completed. This allows the air/fuel mixture to begin burning at the very top of the stroke, providing more time for the heat expansion to act on the top of the piston, which is where you get your power from.
Higher octane fuels burn slower, and thus need more advanced timing to make the most power than lower octane fuels. Advancing the timing too far can also slow the piston speed, costing you power. Just FYI.
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-Harry
AIM: NDcissive
CRX and Pre '92 Civic, Engine Tech and Tuning, & Track and Autocross Forum Mod