my understanding is that the theory is different between 2 stroke and 4 strokes..
the basic theory is it takes time for the spark to ignite the fuel, so in order to allow time for the ignition to get going it makes sense to fire the spark before tdc so that the burn reaches its peak just at, or immediately after TDC, giving maximum power at the right spot, kind of if you're pedalling a bike, the best place to shove on the pedal is just after the top and not before or halfway down.
in your old car, as the revs rise the distributor moves the spark so it happens further before TDC (advancing) the theory being that as the engine gets faster you need to start the fuel burn earlier so that it still reaches its peak at TDC. However in modern cars the whole thing is computerised so the ECU works out where the spark should be based on a whole lot of engine and atmospheric data and fires it at the point its calculates as best.
In two strokes the design of the combustion chamber is completely different, no valves, no long compression stroke, a squish band.. this means cryptically as the engine gets faster the way the ports feed fuel, the way the expansion works and the effect the squish has on the mix of fuel and air means it burns a hell of a lot quicker, thus you need to ignite it closer to TDC or it will reach its peak burn too early causing strain on the engine, overheating and lost power. thus in a two stroke the spark has to happen later as the engine gets faster (retarding)..
this means that on a tuned scooter using a static timing method the advance is reduced so that it is working best at peak power, which is when the engine is most stressed, this has the disadvantage that starting and poodling around the engine is less efficient and doesn't run as smooth, but its a compromise between this and blowing the engine at full power.
the various ignition boxes out there seek to electronically alter the timing of the spark to bridge the compromise.. thus an agusto is a simple device that just retards the ignition as the engine gets faster, so you set the ignition at 23 degrees or whatever to start, and once the engine gets to a predetermined speed starts to retard back gradually until say 15 degrees when the engine is going full beans. the more sophisticated boxes do the same thing, but on a more complicated pattern than a simple straight line to match the characteristics of your motor.. A little bit like the ECU in the car above, but again much simpler as they cant measure atmospheric pressures, knock, inlet temperature, exhaust lambda, etc etc..
I hope that helps explain, experts feel free to correct me and hope I'm not coming across as a smart arse
