Advancing cam timing increases the low end torque, retarding it increases top end power. Notice I said torque and power. Torque is what does the work, horsepower is a relative term that is a comparison of torque and rpm (hp = torque x rpm / 5252). With any engine, torque and horsepower are the same at 5252 rpm (I don't remember where they got 5252 as a constant in the equation, but that's what they came up with and it is the industry standard). If you're drag racing advacing the cam will give you better take off for a better elapse time, but a little less mph at the finish. If your dirt or road racing, retarding the cam will allow for better cylinder charging while the intake is still open for more top end horsepower, where they race at the top of the rpm range. Everything is a trade-off in engine design and available power (or torque). Car designers comprimise accelleration and economy for showroom vehicles, from Pintos to Hemi-Chargers, they both give what they built it for, some economy and big take off for the hemi, but sufficient accelleration and good economy (for the years built) for our little pony's.
As for milling the head, every .020" reduced to increase compression ratio retards the cam timing by 1/2 degree. Ford Motorsports makes an indexed cam sprocket to dial in cams to whatever timing you want, they show up on Ebay regurlary, relatively cheap also. There are 9 keyways to adjust timing (+8,6,4,2,0,-2,4,6,8 degrees) Just remember that when you play with cam timing, you will have to play with ignition timing to get the best efficiency and power.
For those who have the Desktop Dyno 2000 or later software, play around with the cam timing option and see where the power band ends up for each different set-up.
Hope this helps and good luck!
Respectively,
Wes
Over-Achiever Racing