This technote specializes in exactly how to configure the megasquirt to read the hall sender in a VW distributor and then fire the coil. This applies to the V3 PCB and Processors Megasquirt I and Megasquirt II.
First, Jumper XG1 to XG2. Then Jumper TSEL to OPTOOUT as shown in the following pic:
The next jumper is between TACHSELECT and OPTOIN
The next jumper is between IGBTOUT and IGN
The final jumper has a 330 ohm reisistor in it, and it must go to the top leg of R26 – that is, the side of the resistor nearest to the DB9 connector.