I just put one in my 250 SL. #1 should be at TDC on the compression stroke (piston at top of cylinder). Timing mark should be aligned at TDC or 0, as you indicate. This should enable you to start the car and then use a timing light to set the timing to 30 degrees @ 3K rpm, at least as indicated in my factory specs.
When I installed mine, I noticed my drive gear was not parallel with my rotor in the Bosch distributor as it is in the 123. This meant the 123 was rotated about 20 degrees clockwise from the Bosch when installed. Be sure to mark your wires and ascertain that the rotor is coming up (clockwise) on #1. The firing, and therefore clockwise wire order, is printed on the valve cover.
Not sure if there are differences to the 280 vs. my early 250.
The car runs magnificently. It ran very nicely before, I was just eliminating future maintenance with the 123, but I could barely feel the car idling at 800 and she revs very willingly.