Scott,
Here's all ye need know about SWB distributors.
http://forums.pelicanparts.com/showthread.php?threadid=252299
Back after that long read? OK, the easiest way to tell if you have an SWB distributor is to look at the body, they are black-painted cast iron. A '69S should have an aluminum bodied distributor with a yellow-cad-plated distributor clamp. If it's a normal the nomenclature plate should be black and white. If it's an "S," yellow. Whoops, now the price of distributors just went up again.
The reason you need a half-moon shaped cutout in the SWB cap is so it will clear the white plastic circular insulator where the bolt carrying the points connection passes through the distributor body. In the later cars, there was a plastic insulator that replaced this, so the half-moon shape went away. It was replaced by a distributor clip that sticks up a couple of mm from the distributor body, and this fits into a square-shaped notch in the new light brown cap.
Can you use an SWB distributor on an LWB S? Yes, but it's clearly "wrong" to anyone who knows what they are looking at. Also, the SWB distributor uses an older style of points that relies on a spring to carry the points current to the distributor body. There is a paper insulator to prevent the points from grounding out on the distributor body and a very precise assembly sequence that must be followed when replacing the points, all of this noted in my thread above. The LWB distributor uses modern points with a wire to the plastic insulator, with the result that they can be removed and serviced a hell of a lot easier, without even removing the distributor. So I would recommend that you track down a correct 006 or 007 distributor.
Here's the other problem: you need the correct advance curve. MOST cast-iron distributors are worn out and end up giving like 45 degrees of advance because the pivots and springs are sloppy. If I had a '69S with the wrong distributor I would buy a brand-new Bosch, have a machine shop cut off the cast-in clamp and turn the shaft down to the correct size for a 2,0 motor (smaller than the 2,7 for which the new distributor is offered), blank the vacuum advance port and have the curve set for an "S" with modern gas. Many of the pro shops who post on Pelican can do this for you. It's not cheap but it's very, very important to do correctly.
In the alternative, if you find a core 006 or 007, have it overhauled with new springs, teflon rubbing plate, new bushings, etc., and have the curve precisely set to "S" specifications.
Hope this helps! Check Warren's Distributor Lube thread for more excellent information.