OK, I'm confused now. Never heard of any type of gap to be adjusted in the voltage regulator. YOu might try replacing the voltage regulator as a whole to see if it helps with flickering. Flickering is a common prob with these older vehicles and their components.

 

You might want to replace the light switch in the dash. That's what fixed the flickering on mine.

 

are they pulsing or actually going on and off?? if they are pulsing then you need to buy an electronic regulator and do away with the mechanical one. if they are going on and off i agree with the above its probably the headlight switch

 

If you have an original Voltage regulator, yes it has points, and flickering is a common sign that they need to be adjusted, and probably filed flat.
Personally, for the price, I would just replace it with a new one. They are completely solid state, no points, and no flicker.

 

The small round cylinder is a capacitor. Capacitors are generally used to stabilize voltage.

 

Replace the voltage regulator first, then proceed to the light switch if that doesn't cure the problem.

BTW, Be sure that your ground cable on the battery is unhooked while replacing.

 

A condenser is a capacitor of sorts. It is used to help remove the electrical noise created by arcing across contacts as they break each time they open. On older Mustangs, there is indeed one on the distributer and one at the points type voltage regulator. The newer type solid state ignitions and solid state regulators do not have points (contacts) that open and close and therefore do not need the condenser. Many of the original type replacement voltage regulators are points types like original. If you are wanting the OEM look, buy an original replacement and a Motorcraft current replacement. The innerds and base of the new Motorcraft will fit together with the cover for the original type. Original look, new solid state performance.

 

The gap in the contacts on the relays in the voltage regulator are not adjustable, not the problem.
If you have a volt meter then you can check the regulator and alternator, or go to Autozone and have them check it out, its free.