Unless the original Marelli distributor is brand new, the 123 dizzy will improve things. On standard engines the Fulvia 4SR works very well. See
http://www.viva-lancia.com/specials/ignition . If you have a non standard engine or just like to experiment, the TUNE does well if you program the proper curves into it. I use the 4SR without vacuum on my own cars. The TUNE version has a vacuum input. It is not available without the vacuum. If you do not connect it, it operates as a version without vacuum.
It works with the S3 rev counter. Or rather the rev counter works with the 123 4SR as well as the 4 SR TUNE.
Another matter is that the power rating of the input resistor of the electronics of the Veglia rev counter is underrated. It is a 0,25 watt resistor. It should be a 1 watt resistor (PR01) or 2 Watt (PR02) if 1 Watt is not available. It is the standard beginners fault for electronic engineers when designing pulse electronics for the first time. I made it my self 35 years ago. This resistor will bake brown and ultimately fail with any ignition. I did post a circuit diagram of the rev counter electronics on this forum some years ago.
Fulvia engines are sensitive to the electrode gap. This is the case with an original Marelli dizzy as well as the 123 dizzy. I use NGK BPR7ES with the gap set to 0,6mm. On new spark plugs the gap is always larger. You have to adjust the gap. See also
http://www.viva-lancia.com/fulvia/qanda ... kplugs.php. Or I use the NGK BPR7EIX iridium spark plugs. When you want to use these DO NOT adjust the gap. Do not touch the electrodes. The risk of breaking the tiny center electrode is too high. The tiny iridium electrode will spark well in any circumstance over any distance.
In distributors with electronic advance the position of the rotor relative to the contact in the cap varies when firing. That in combination with the higher spark voltage makes it necessary to replace cap and rotor every 30.000 km. It is a good idea to have a spare cap and rotor in the boot.
It is also a good idea to use good plug cables. Some decades ago there were only copper conductors. Some people still think that copper gives the best spark. However after some cycles of increasingly tougher RFI and EMC requirements some have come to the conclusion that subtlety gives an excellent combination of performance and life time.
Do not use copper. It only reduces the life time of contacts and electrodes.
Avoid carbon fiber cores. It crumbles over age and introduces a resistance in the circuit. It helps against radio interference but does not lengthen the spark.
Best is to have a wire wound core. The inductance of the core stores energy and the spark lasts longer. It also gives excellent interference suppression which is good. After all, there is quite a bit of advanced electronics in the dizzy.