Charlie:
I understand your point (pun NI) about rough setting points and never having a problem - most small engines are pretty forgiving when it comes to timing, much more it seems than carb setting..HOWEVER, when the operating conditions start moving out to the edges of the design envelope and the engine runs too hot (retarded) or pinging from preigntion from too much advance, taking little gouges out of the piston, more accurate setting of timing, using the marks, pays off.
A comment on how cam timing does affect ignition timing.. lots of small engines have the point cam on the flywheel and open every rotation, although the engine needs spark every other rotation. The Kohler uses a point cam on the cam shaft, which rotates at half engine speed, so the engine only gets spark every other rotation. Again, the point (pun NI) is that cam timing, as Jeremiah mentioned, is important, as the timing marks on the flywheel assume proper cam timing.. (I'm sure the pullers can attest to how complicated this can get, if they run cam timing anything other than straight up, LOL). Actually, if you can get the spec, the most accurate timing spec isn't based on rotation, but how far below the deck the piston is on the compression stroke when the points open... Since its usually not practical to set timing this way, we index the flywheel with timing marks (or measure point gap at that point, then at maximum point opening, subtract the difference and com up with a spec based on point gap..... which can vary because of tolerances in individual engines....
Don: Black smoke doesn't come from bad ignition timing - do we need to send you back to small engine school? - Maybe you need to go down to Gows Hardware and see if there's somebody that can help.... Maybe there's someone in Italy Cross or Cherry Hill that can give you small engine pointers (I don't think Canadian Tire has anyone)