I think the spacer needs to be there - it would seem like it'd would damage the pump arm if it wasn't in place - tolerences and all.
Also, on the idle, there's a plate under the hood that tells you what to set the idle at. Generally it's 650 RPM. When you set it, set it when the truck is fully warmed, and you'll want to use a dwell/tach meter - you can pick one up for about $20-30 (here's one:
http://www.sears.com/sr/javasr/prod...0&vertical=TOOL&pid=00921029000&bidsite=CRAFT . Might check your local AutoZone or Oreilly's, too, they usually have a tool loaner program - might be able to just use that instead. you can't set it by ear, really. If you're running rough at 650 (and you can't really trust the one on the truck - it's more for approximations) that means your valves are out of adjustment, there's a vac leak, bad PVC, timing could be off - there's a whole list of things that it could be. Anyone's truck would smooth out at 850 RPM.
Speaking of tools, this might be a good place for a thread hijack: Aside from a dwell/tach meter and your usual hand tools, you'll also want to get a multi-meter, a timing light, a compression gauge, a good set of feeler gauges, a decent jack and jack stands, a vacuum gauge and a 12/6 v electrical test light. All are very helpful when working on a 60.