The stock engines are built with an amount of retardation in the ignition to ensure good combustion with poor quality fuels, especially in parts of the world where petrol can be adulterated with cheap additives.
If you're in a country where this isn't a problem, the advancer allows the ignition to take place later in the stroke, giving better power.
In simple terms, a higher octane number means that the fuel is more resistant to "knocking" (premature ignition of the fuel) but that only really benefits high performance engines and you're unlikely to notice any difference except in your wallet!
