well i just hooked up freescan for the first time and took the car around the block. the log showed that it was pulling out 7 degrees of timing. now i know that this hurts, but exactly how much is it killing performance? could i gain like 3-4 mph if i get it down to 0?

 

Depends when its pulling th 7deg of timing.... losing 3-4 MPH would mean a loss of 25-35HP. I doubt you'd see that much, but if you're getting the retard at WOT and in the heart of your power band, it definitely isn't helping.

However, I've seen data logs that show a brief spike of knock retard when the tranny shifts... is it possible that's what you saw?

Might want to look this over:

http://members.aol.com/InjuneerZZ/ScanMast.htm