With the plug and play AEM it uses the Ford factory distributor for crank position and has no cam position sensor. There are a couple issues here to take into consideration. First off a factory distributor in a small block ford is probably 20+ years old and aftermarket components are usually even worse in terms of durability and accuracy.
That issue aside, the real problem lies in how the AEM EMS calculates crank position using the 8 teeth in the distributor (which equates to 4 teeth per crank rotation). I don't work for AEM, but I have worked on several small block Ford AEM installs and this is my understanding of the problem. The AEM series 1 box "internally" calculates off of 12 tooth positions on the crank (or 24 per engine cycle or every two crank rotations).
In order to make up for the lack of crank position teeth, the AEM interpolates and tries to anticipate where the crank position is based on 4 teeth. Got that? It's expecting 12 teeth per crank rotation, but the stock distributor is only giving it 4. It's hard to anticipate crank position when the engine is revving up quickly like during drag racing. Essentially, the stock distributor does not provide enough resolution for the AEM and when the engine revs over 6000 RPM, it eventually will have a timing error and will misfire.
The AEM box is VERY flexible and can be configured for nearly any cam/crank sensor configuration. Your options for fixing the timing error:
1) Crank Trigger with Modified Distributor (keeps the stock coil)
2) AEM EPM (Must use 4 wasted spark or 8 individual coils)
3) Crank Trigger with Cam Sensor (Must use 4 wasted spark or 8 individual coils)
If you do option 1 above, there's no need for changing out your ignition. I have installed 12-tooth crank triggers and modified the factory distributor on a small block Ford to act as a cam position sensor. It performs flawlessly in a twin-turbo setup on a small block.
