First, some terms we can all agree on.  After starting, an aircraft engine runs with the spark occurring some Degrees (D) Before Top Dead Center (BTDC).  Before the piston reaches its' highest travel in the cylinder.  This allows for the time it takes to finish the compression stroke, burn the fuel and reach some maximum high cylinder pressure some degrees after top dead center (ATDC), during which the most work can be done by the piston over a certain range of rotational degrees in the down (expansion) stroke.  Many aircraft engines are timed to fire the plug 25 degrees BTDC - not an arbitrary number, but one that is a compromise providing good operation over a range of mixtures, RPMs and compression ratios including its corollary - altitude air pressure - if the timing is fixed, as in magnetos.  Thus, 25 DBTDC is useful over a broad range of power settings.  At 2500 RPM, the engine is rotating 15,000 degrees per second and, at 25 DBTDC that is merely 1.67 milliseconds BTDC.  Generally, advancing the spark means earlier or greater than 25 DBTDC and retarding the spark would mean later or less than 25 DBTDC. 

 

In examining many computer adjusted spark timing schemes, 2400-2600 RPM and 21" - 24" MAP generally yield about 25 DBTDC for engines with a compression ratio (CR) below 8.6:1.  Higher CRs suggest a reduction in the base spark advancement regime (retard or later than 25 DBTDC), as do very high power settings so that the optimal cylinder pressure is reached at the right time.  Likewise, low power settings suggest advancing the spark for the same purpose.  Lower power settings are frequently reached by flying at higher altitudes (say above 8000 MSL and Wide Open Throttle or WOT), where even high CRs can't completely compensate for lower ambient pressures.  Note that induction pressures are maintained by engines equipped with superchargers or turbochargers and have low CRs. So, in discussing only normal aspirated engines:

 

Do timing changes increase HP?

 

One might additionally ask, relative to what? Not more than the laboratory engine can deliver (all other things being equal), but adjusting the timing to deliver the best, non destructive cylinder pressure can have a beneficial effect on performance.  The aircraft engine cam may be timed (valve timing) to deliver max torque at 2500 RPM, but HP is also related to RPM. Where:   

HP = (Torque x RPM)/5252

Thus, HP rises as RPM increases to some practical limit. Thrust is another story.

 

Do timing changes provide more efficient fuel consumption?

 

At low power settings, (more importantly, high altitudes Wide Open Throttle), spark advance can better utilize fuel burned in the cylinder.  Thus, higher CHTs, Lower EGTs and lower fuel burn for the same or more power (again, trying to reach optimal cylinder pressure).

 

EIs, used in cars for many years, provide additional benefits because of consistent, high energy sparks to plugs with exotic metals and larger gaps that are more effective at always lighting the fire.  Consider the many EI systems available or being developed for aircraft engines that do indeed alter the spark timing - PRISM, P-MAGs, LASAR, ElectroAir, EPIC, TCM FADEC, etc.

 

Gross spark mistiming of any engine can lead to its destruction - too early or late can result in extreme cylinder pressures at the wrong time.  It also depends on the engine since some large displacement engines are "sensitive" because they got that way by boring and stroking a lesser capacity cylinder, thus weakening its structure.

 

BTW, without going into the circumstances, my original IO 320 ran for 20 hours on magnetos with less than optimal timing - when finally measured, it was 34 DBTDC.  Yes, it ran hot and rough, rationalized as symptoms of a new engine.  There was no evidence that the engine was damaged.