Fotis

I find it funny you didnt bother to try to rectify the incorrect distributor position before doing all the extra work and spending money on COP.

Not likely to cause an issue. 
 

Yep that will do as a start and we can do a trigger capture if needed to refine that

Jump on and download the PC link tuning software. The help file will have 99% of your questions covered.

Yes completely forgot to say that too! Make sure you do as Simon has said! I forgot and fried some new coils lol 

Make sure to change over the spark edge too for the K20 coils.
 

Remember to change the dwell table to accommodate the k20 cop. 
I can send my table later if needed when I get home from work. 

The DC adaptor is just to supply power to the router, it plugs into the micro USB port that you see in the pic above next to the two Ethernet ports.  On the back of the router, not shown in the picture is a normal USB A port that the ecu tuning cable plugs into.  The Ethernet ports will not be used at all.

You have it mostly right.  4 tooth sensor goes to trig 1, single tooth sensor goes to trig 2.  Both are reluctors.  Set trigger mode to "1 tooth per TDC"  Set trig 2 sync mode to "cam pulse 1X" and sync position according to where the single tooth is located.
 

I beleive that this is correct - just like a sr20DE i setup recently both trig 1 and trig 2 are driven off the CAS that is located inside the distributor cap and no crank trigger is needed. Ive just had a quick google on trigger setup for this engine and there seems to be alot of info on Megasquirt formums regarding trigger wiring etc. You can most likely get your answers off that. 

Actually, that is not quite right above.  Honda's distributor outputs a "rising edge" signal so the connections to our ecu are reverse polarity.
If you are fitting an aftermarket trigger, the Crank signal needs to go to pin B16, the cam signal needs to go to pin B12.  Our ECU doesnt use the TDC P/M.  ECU Sensor ground are pins B11 & B15.

you will have no problem maxing out the VF37 with the stock engine, it can take that turbo no problem with a proper tune.

Quite simple, bad tuning can destroy even the best engine in a matter of seconds.

i think is something around 104... but to be honest doesnt matter as alcohol cool everything they usually performe like higher octane fuels in some occations... you will not be octane limited to tune that car, we have 97ron pump gas here and I have tune 250whp 2.0 B series without problems reaching MBT, as the B series ussually you dont have really high CR as other engines (cause is very difficult to get more without modifien the combustion chamber on the head). 12 or 12.5 is ussually what you get from those engine and with massive cams to make the power you shouldnt run into problems with knock, be aware cause you never know but with methanol you are gonna be fine.

Difficult to see the plug looks old but there is a lot going on, the plug is to cold, the timing looks too advanced and the fueling looks ok, you say 11.3:1 but you haven't said what fuel you are using.

Hydraulic lifters should have zero lash and be near silent.  If they are making that much noise you cant hear knock then there is either something wrong with them or the rocker geometry or cam profile.