Once you have the power (mechanical) side of the advance set up, you get to start on the economy (vacuum) side. Make sure you're not getting any vacuum advance while doing the mechanical side though. I'd disconnect the vacuum line just to be sure (plug the line).
The answer to how much vacuum advance is as much as it can stand without detonation. You should have a little notched piece that limits the amount of timing your canister can give you. I'd start with about 14 degrees of advance and adjust the canister so that you get just a trace of detonation as you increase the throttle reasonably quickly (poked but not floored). A quick note, your engine will tolerate light detonation with light throttle for a while (in terms of seconds) but be careful, don't overdo it. The trace of detonation should be quite short (5 - 10 pings) before the canister adjusts the timing to the new throttle setting and load. Then adjust the canister back just enough to eliminate the transitional detonation, and whatever safety margin you feel comfortable with.
As far as ported or manifold vacuum source, start with ported vacuum but try them both to see which the car likes.
It is quite possible to have the carb and distributor tuned so that the engine responds almost as good as with fuel injection. I think there are posts already here that cover tuning the carb, so once you have the chain and distributor done, have a look or just ask.
One final note, I played with my advance curve at the dragstrip and managed to slow down by about .3 seconds by putting in too fast a curve (no detonation!). The best way of determining what your combo needs is to lock the distributor so it has no mechanical advance and time your acceleration in 500 rpm stages, i.e., from 2000 to 2500, 2500 to 3000, etc. to 4000 rpm in your first gear while adjusting the timing to get the best accel (quickest time) in that rpm range (no pinging allowed). You then graph the timing points at the average rpm (2000 to 2500 is an average of 2250 rpm), get your mechanical advance curve to match your graphed curve and you're set! And do your tuning on a hot day.