Set the gap on both sets of points. One set will be fixed to the backing plate. Time this set first, setting them to open at the static timing mark on the flywheel, using a continuity light, buzz box or radio. Then time the second set, which will be movable with respect to the backing plate.
Well to adjust the points on the bike you need to make sure the line up square and not off to one side or the other. If you need to "dress" them (file them) use a points file, then run a piece of clean cardboard thru the dressed points a couple of times to clear away any remaining debris. Next make sure they open to the proper gap and once that is set, then adjust the "when" of their opening (the timing of the bike). You may need a degree wheel to do this or may be able to do it with simply pulling a plug, installing a pencil into the sp. hole and slowly rotating the crank and observing the pencil, when you see it go down and then start coming back up, keep an eye on it till it stops ascending. That is TDC. Move the points plate to the degree it is suppossed to be and make sure the points start to open (break contact) when they are suppossed to.