Realistically, only the advance hose will affect your timing at anything other than idle. But to make sure, disconnect and plug both hoses.
If you have a 1.7 or a 2.0 with stock parts--
Run the engine up to 3500 RPM by opening the throttle valve. 3000 is probably OK, but the procedure calls for 3500, probably "just in case". I use my left hand on the throttle lever on the throttle body itself. Use the right hand to hold the timing light (set to 0 advance) and shine it into the hole in the fan shroud. Use your third hand to hold the mirror so you can see the timing mark, and with your fourth hand you turn the distributor until the mark is in the notch.
If you're one of those poor unfortunates who do not have four hands, you might need to be a bit more creative. I have painted the whole top of the fan blade closest to the timing mark. It's BRIGHT RED.
That way I don't have to have a mirror to see the mark. I can also see the mark when the timing is not correct, which helps me know how far to move the distributor. I can see, for instance, that I'm off by two fan blades. So I can let go of the throttle, let the motor come back to idle, shine the timing light on the fan again and turn the distributor so the fan moves two blades worth in the light. Then grab the throttle and open it up to check where the timing mark actually went.
Another option uses the TDC mark (if present on the fan). I painted a white mark on the fan to help me find TDC, and it would be useful here as well. You set the advance knob on the timing light to whatever the correct number is, then rev the engine to the correct RPM and tweak the distributor until the TDC mark is in the notch in the fan shroud. (For a 1.7 or 2.0 motor, that's 27 degrees BTDC at 3500 RPM.)
And yes, you hook up the electrical connections to battery(+), battery (-), and plug #1.
--DD