That is actually the crank angle sensor. You can adjust the timing with that. There is a connector that you have to ground out so you can adjust base timing using a timing light and a mark on the crank pulley while rotating the crank angle sensor. Pulling the timing back or retarding it will make the engine really sluggish and have low manifold vacuum. Advancing it will increase responsiveness, but can cause it to ping or detonate.
In the video that sounded like rod knock, but if that is detonation at idle I would be surprised. Maybe retarding the timing caused the knock to go away because the cylinder pressures where low enough to take the pounding off the rod bearings. If you have too much cylinder pressure from high compression or over advancement for some odd reason, retarding will also take pressure away if detonation is the source of that noise.
What you could do is connect up your timing light and with the engine running look at the mark and scale at the crank pulley and see what the ignition timing is at. If you have a timing light with an advance dial you can figure how much the ECM is advancing the timing if the mark is off the scale. Base timing is 5 degrees BTDC and when the ECM is controlling timing it will be advanced around 8 degrees BTDC. It will probably fluctuate when the ECM is in control.
If timing looks good and your not running some radical compression ratio or having high cylinder pressures in combustion chambers igniting fuel before the spark occurs, you probably looking at a mechanical problem.
