Think of the alternator as two circuits.
First Circuit goes to the Rectifier (rec) where it changes the power created by the alternator from AC to DC. There are 3 same-colored wires that go into the rec (this is where the power is converted - usually white, sometimes yellow). The Rec also has a red wire that come out and goes to the battery (to charge the battery and power the entire bike system), and a ground wire that connects to the alternator ground wire. all these wires go thru the connector block. There will be an other wire sometimes yellow, sometimes white, that was originally used as a kickstand switch to prevent the bike from being ridden with the kickstand down. In the modern wiring schemes, that wire is simply not connected and capped off in a secure way (so you don't get a short circuit)
The second circuit is the Regulator (Reg) to the alternators brushes. The brushes push electricity into the alternator, and that small ammount of electricity creates an electromagnetic field that makes the much stronger electrical charge that goes to the Rec... the brushes will keep putting charge into the alternator until the regulator regulates the amount of juice in the brushes. It knows how much charge is in the battery by way of the sensor wire (brown wire). When the battery/system charge gets below 14.2 volts, it turns on the juice to the brushes. When the stsyem charge goes below the 14.2 threshold, the regulator turns up the juice to the brushes. In order to keep the regulator wire from draining the battery while the bike is off, it must be hooked up after an on/off switch (like an ignition-style key switch or a kill switch, so it won't pass juice to the brushes while the bike is turned off). I have an M-Unit, so I spliced the brown wire into the aux output of the m-unit, but most folks splice it into the power wire between the key switch and the headlight.
