Well you should be running 20:1 (as per the manual) in the PE or maybe 25:1 at worst. Theres no way on earth i would use any less oil than that. if your getting plug fouling, and a tone of oil and smoke out the back on 20:1 then there is a problem elsewhere, its not the oil. I have seen plenty of bikes that run fine on 20:1, hardly smoke and do not have a lot of black dribble out the pipe.
There are quite a few good topics on oil ratios on here that you will find a lot of stuff out about and learn a lot. i suggeset looking back through the 'tech tips' board on this forum. Those oil threads will answer most of your questions.
How do i check the timing?
Well first you should get some manuals for the bike, They tell you how to do it in there and give the specs. Its pointeless trying to work on a bike which is new to you and you dont have any knowledge or info on the bike. If you have manuals it will save asking a lot of questions. they are free to download aswell and cost nothing unless you want a hard copy. I dont know how knoweledgeable you are. Do you know the basics how to set a dial guage up on the piston and a degree wheel on the crank and all that? thats the only real accurate way to do it.
One other thing you will need a flywheel puller to get the flywheel off. You can get them from any bike shop who deals with
www.mcsonline.com.au & contact them for your nearest dealer) or you can find the pullers on ebay,
www.denniskirk.com and i reckon
www.repairmanual.com has them plus many other online accessory shops. You can also make them if you want as its just a flat plate and a couple bolts and a center screwing bit. I should also point out that you can do some serious damage if your timing is out. Seen that happen on a PE before.
Its always worthwhile to check everything out on a bike you just bought because you really have no idea who has fiddled with it and mucked around with certain things.