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I've never had any issues using a dial-back, although I usually don't use one. I do get the "bouncy" timing every once in awhile, but it depends on the springs that are in the distributor, how small the distributor cap is (you can get spark scatter with a small cap), and how the distributor gear interacts with the cam gear.
Just used one a few weeks ago. Was helping my engine builder buddy dyno a SBC that a random guy brought in. It had no timing marks on the balancer, so we verified TDC/zero, and used a dial-back. Timing was rock solid, no scatter. That was with an MSD distributor and box.
May depend on the brand of light, but I know a few guys who run dial-backs with their MSD stuff.
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