What is the vacuum at idle speed? The distributor mechanical advance could be right at the point where it's beginning to add advance- this will cause a surge like you describe, unless the ignition advance is electronic. So, what is the timing curve set up like?
Depending on if you're using manifold or ported vacuum for the vacuum advance (if used) can also have an effect on the idle stability.
I'd be suspicious of a vacuum leak- possibly at the intake gaskets, or a malfunctioning PCV valve.
Is the TBI system going into closed loop? If there's a sensor out of range- like the coolant temp, or MAP (if used), etc.- this can throw the system into chaos.