How to listen for knock? Not sure what you mean. Sounds like you are shaking rocks in a coffee can. And you certainly CAN hear it, so I'm not sure why you would say something like that. At least I can, but my hearing isn't all that great (been struggling with tinnitus for a decade or so now). In the "old days" the way to adjust your distributor and advance curve was to listen for pinging and change your initial timing and springs until you eliminated the ping - so maybe it's something people just don't know how to listen for any more.
Adjusting octane is done at the pump. In MA (and I think 37 states) we have different formulations for winter gas vs. summer gas, and you can also use lower octane when the temperature is colder. Right now I'm running 87, but in the hottest of the summer I was using 89. I think we switch to winter formulation around October 1, so I will be listening for knock and might have to adjust to the winter fuel until it gets really cold again.
Knock retard is a reactive function, the key is to avoid knock in the first place. But most people think of knock retard at full throttle (which is what will cause you to break a piston) - knock at light throttle (especially transitional knock), accumulated over 100's of 1000's of miles, is what will kill your bearings.
One of the things I've done to reduce knock is to get rid of the function that reduces acceleration enrichment as a function of MPH. Not sure why that parameter even exists, except maybe as some kind of emissions thing perhaps. But I have full AE regardless of MPH. I've also set the target A/F ratio to 13.9 instead of 14.7 to compensate for the E-15 that we have in MA (and this helped gas mileage as well).
I also change to a 180 thermostat in the summertime, and a 195 in the winter. Obviously engine temperature can affect your octane requirement as well.
-BC
