I have a 97 Z28 but I was looking at a 96 Z28 owners manual and it says that if your 5.7 doesn't have the letter "P" you can use 87 octane gas but if it contains the letter "P" you have to use 91 octane or higher. My car has the letter "p" on the 8th digit on my VIN. What is so special about the " P" on certain LT1's. Is it the timing or compression that was changed?

Perhaps it is the knock sensor sensativity

Why would GM put a higher knock sensor on certain LT1 motors?

I think it would be for B-Body LT1s that have a lower compression, so they can use 87 octane.

The 8th position of the VIN indicates the engine. "P" is the code for all LT1/V8 engines. There is no other code used for an LT1. "S" is used for the 3.4L V6, and "K" is used for the 3.8L V6. There is nothing "special" and there are no differences with "P".... they are all LT1's.

Your owner's manual is a Camaro (not Z28 manual). When they say "P", they mean LT1 (as Injuneer noted).