hay divy, good to hear all your wiring is done man, not too hard aye?? with regards to the pick up sensor, have you undone the screws and moved the sensor back towards the rear wheel (sometimes there is a slight ammount of play between the sensor and the flywheel.) for timing if you shift the pickup sensor right the way up, then down about 2mm it will set it to approximatly 28 degrees retard (best for little to no kickback and still have good performance) but in answer to your question, yes the middle of the sliding range is 0,0 advance retard.
if it does touch it shouldnt matter, BUT there should be enough of a gap (only the size of a business card depth so less than a few mill)
back to the timing, my advise is to run it like this and then slightly shift the pickup down till you get slight kickback, then move it back up about a mill, this will give you best performance and little kickback (or as little as you set anyway)
hope this all helps.
Cheers, Tony.