Can I run my VW bug on unleaded petrol (gas)?
Short answer: yes.
If you're getting a weird knocking or banging noise, read the section below
Long answer: I've seen this argued about a lot on forums and mailing lists. People who know a lot more about cars and engineering convinced me it was fine and I've been running my 1968 Beetle on unleaded petrol (gas) for several years now.
VW Beetles and campervans have very solid engines which were built to run on two star petrol (British petrol was rated up to four star, which had the highest octane rating) and unleaded petrol has a more than high enough octane rating to keep it running happily.
The lead in petrol used to add a soft layer over the seats of the valves which let the fuel in to the pistons (so it can go bang) and the gas out (when it's gone bang.) If these valve seats are made of a soft metal, they needed the lead to help reduce wear, so they didn't need replacing very often.
As standard, aircooled VW engines have mild steel valve seats, which are more than strong enough to survive without the lead added to petrol. If you've had your valve seats replaced then you need to find out if they were decent parts or not. If you're not sure or can't find out, there are additives you can add to unleaded petrol which has the same effect as the lead did - check out your local motor factors or Halfords to find some.
I didn't need to change the timing on my car when I went over to unleaded, but it is a good idea to check the timing if you're converting over to unleaded, and especially if you get an odd knocking or banging noise.
If you're getting a weird knocking noise
If the engine makes a strange banging noise when it's idling or going along, this could be 'pinking' or 'knocking'. This happens when the timing of the engine is wrong for the fuel and the spark plugs are trying to ignite the fuel before the valves are ready. It's also called 'pre- ignition.'
This is very dangerous so if it's happening stop using your car right now! You need to adjust the timing so it doesn't happen any more. If you don't, you could seriously damage your engine and it'll cost a load of money to get it fixed.
I hope to write up how to set your timing soon, but as I haven't done it yet I'll refer you to the place that taught me: the John Muir book 'How to keep your Volkswagen Alive'