Alright. No, it is not an interference engine, so the likelyhood of valve damage is minimal. Yes, you do have to independently set the cam and crank pulleys seperately. The repair manual is assuming the ols timing belt is still on the car. Here are some tips:
-The crank pulley has a white mark on its circumference. On the black plastic timing cover there are marks right above the pulley there should be three marks - 0, 5, & 10. The white mark on the crank needs to line up with the '0' mark on the timing cover. This means that #1 piston is at the top of it's stroke, or TDC.
-The cam pulley has a small hole on its face. When this hole is positioned at approximately 11:30 (I think, can't quite visualize it right now) you will be able to see a small vertical notch about 1mm tall and .5 mm wide etched in the area just around the cam seal. It's helpful if you have a small mirror and a flashlight to line it up properly. I'm not quite sure what the manual is speaking of when it references the cam bearing cap. This would require removing the valve cover, of course, and I have never done so. Perhaps there is a timing mark, but I couldn't say. (BTW, I am referencing the N American camrys. I don't know if things are different elsewhere.)
That's pretty much it for lining it up. Some other things I would suggest-
-Inspect the condition of the water pump whilst in there. Timing belt failure is most often caused by a faulty h2o pump. Infact, it would be advisable to just replace it. But if not, make sure the H2O pump turns smoothly and has no freeplay.
-One thing that makes this job very accesible (after everything is lined up) is to back the front engine mount bolt out about 2/3, place a wooden block under the engine, and jack the engine up a bit. This will raise the front a bit and make it very easy to get to.
-Good luck and remember, it's just a machine. It has to bend to reason eventually. Post if you need tips.