Simple explanation of adding a capacitor.
If like Allan your alternator setup is in good order, then the cap will allow
the engine to run on just the alternator output. If you wish to use a digital tacho
or electronic ignition it is also a good idea as any smoothing and spike suppressing
on the power supply is favourable for electronics.
A single fuse in the battery line will probably protect the bike's wiring but will not
protect the regulator if it's wired directly to the bike's supply. The alternator can
produce sufficient power to damage the rectifier/regulator, better to fuse that as
a separate entity. (In saying that,,,,,i haven't fused my ones separately............. bloody hypocrite eh??)