fredstev,
This answer is not meant to be a joke or rude; other people have asked the same question. The #1 cylinder wire is the one the rotor points to when you have the #1 cylinder ready to fire (or, nearabouts ready to fire). The position of the rotor is dependent on how/where the rotor is positioned when the distributor is installed (and thus could be in any position).
Thus you start the firing order of the wires from wherever the rotor points when #1 is at top dead center to fire. This position can be tested by putting your finger over the #1 spark plug hole and you feel air pressure as the #1 piston comes up while you or someone else rotates the crankshaft pulley - both valves are closed when #1 fires).
If I'm wrong or if someone else can explain this better, we will hear about it.
Tim
By the way, if you resize your picture to 640x480, the picture is more easily viewable.
