To anyone interested, I just rewired my 1978 KZ650 and decided to eliminate the battery. I used a regulator rectifier with a built in capacitor made by Sparx. I bought it through a company called 7 sins choppers, they gave fast service, I think the reg/rec with capacitor cost $80, about the same as any other new regulator rectifier with the added bonus of the capacitor being built right in.
I replaced my tail light with an led tail light, was prepared to replace the headlight with an led also if the old machine did not make enough electricity to power the regular headlight without the battery. I have to tell you guys that the bike runs great without the battery, I have very spartan wiring, Headlight and tail light that's it. My KZ650 is a hardtail bare bones bobber. If I stop at a bar where there is a bunch of Harleys etc they all come out to check out the little bobber (don't get me wrong, I own and love harleys too) it is interesting to see a guy with a $30,000 custom motorcycle checking out my $1,000 bobber with envy.
I used heat shrink on what little wiring there is, all connections were soldered. I almost forgot to mention that the Sparx reg/rec capacitor combo was really made for a triumph, but I figured what the hell, a single faze alternator is a single faze alternator, British, Jap what's the difference.
I read alot of stuff on this sight and used wiring diagrams that people posted on this sight to figure out wire colors and etc. Evan though my wiring is minimal, it still took more than a full day to figure it all out and wire it neatly. I read in many posts that the battery could not be eliminated, or you would only get one chance to kick start it then the capacitor would drain and it wouldn't start, None of this is true, it starts easier than ever now (kick only of course, the starter motor has been removed.). I have to say this bike is more fun than any Harley, but I am going to have to get a smaller rear sprocket and or a larger front sprocket cause at 118 miles an hour my points ignition starts to crack up, but you can tell that the engine has all the power you would need to go 150 mph if it just had the gears!
P.S. riding a hardtail on rough country roads is not as bad as many folks say, if you keep the stock mid controls, just take some weight with your feet when you come to a bad bump that you can't steer around.