to save fuel is basically put making the engine more efficiant. if you have to make the engine more efficiant, it will probabally benifit both power and gas mileage but then you'd probabally end up having to much fun and your gas mileage will once again suffer. this is what makes sense to me, i might be wrong.
Depends on the condition of your engine as well. You can't expect 35mpg if you're getting a good amount blow-by. Oil in the combustion chamber will also affect efficiency.
If I don't mash on the throttle too much, I usually average around 26-28mpg combined city/hwy with ignition timing advanced to 15 deg. on 87 octane. The engine has around 177k miles.
Keep in mind, stop and go is a different situation. You'll always waste more gas than intended because of the richness of the air/fuel mixture at idle and the actual force needed to move the car many times over. 18-20mpg sounds about normal for heavy stop and go traffic on an older engine (which is why Toyota made hybrids). VVT-i technologies help too.