Timing Terminology

[84LX89GT]

Yes, you want to fire the air/fuel before top dead center, so by the time it started to push on the piston/while it's still compressed it's just after top dead center. 10* top dead center is when the piston is slowing down near the top of the stroke, at higher rpm's it just needs to get started earlier so After top dead center the gasses are expanding from the reaction.
After top dead center a car would not run very well (if at all) because the air/fuel would not be compressed (when air compresses it heats up, which eases the burning process) and as a result only a small amount of the air fuel mixture would end up burnt.
Usually when people refer to retarding the timing, they're just talking about getting it closer to top dead center and dropping down the timing advance.
You want to do this when you have pinging (pre-ignition) which is when spark is occuring too soon for the burn (such as running a lower grade/faster burning gas), or sometimes if there is detonation (something in the combustion chamber heats up enough to combust the air fuel too soon). This usually results in rocking the piston because the motion has not been transferred to moving the piston back down the stroke. Also for detonation if the combustion chamber is hot enough it will cause an air/fuel explosion rather than flame travel accross the piston. Flame travel is what pushes the piston down away from the cylinder head. Detonation can be severe enough to melt, or burn holes in pistons.