The term *Tuning* varies by user.
IMO, tuning is adjusting all aspects of car to get the best performance possible. You can tune the car's, suspension, brakes, and engine. ie tune the suspension for drag racing, and launching well, vs a road racer, vs a cruiser.
As far as engine tuning, you have fuel, spark, IAC, EGR (if used), Deccleration Fuel Cut Off, Power Enrichment, and the TCC stuff.
Tuning a car, correctly, IMO, means being able to optimise all aspects of all the calibration data to, get the max performance, and enjoyment from a car.
You can use chips, you can tuning systems (Translator+, ME), edit you own chips, or write your own code. The *chip* contains about a 1/3 of the programming that the car actually uses. There is even a way to remove, the *on board code*, and then write you own complete for the engine to run on. Once you get to writting your own code, then you can get the engine *tuned* exactly the way you want.
As for tuning tools, a good data logger, WB, and EGT just make life easier, and tuning faster and more accurate.
Generally, the street guys are limited by octane so you want to just keep the motor out of detaonation/ preignition, and get all the power you can. There's a thread labed Abnormal Combustion that discribes what detonation and preignition really mean, and how they tear up an engine.