Hi Mike,
earthing point the starter +ve earth cable from the battery terminates
Ime of original T160's, they had the thick +ve earth cable attached in at least three different places, afaict roughly corresponding to whether a given bike's 'early', 'middle' or 'late'.
Les is correct about 'early' and 'middle' (bearing in mind the workshop
manual wasn't compiled 'til the early 1980's is probably why John (Nelson) put that location in). To cheer Les up, on 'late' T160's, it could be fastened to either of the top nuts on the left-hand (drive-side) engine plate; this actually makes the most sense and the shortest route, as the +ve
battery terminal is under the side cover at the front.
However, where exactly you attach the +ve cable is gloriously irrelevant ... the starter earths through its mounting on the engine ...
As you're rewiring the bike, few other ime:-
. The aforementioned standard position of the
battery terminals - at the front of the
battery, just behind the coils - makes it more difficult to fit the sidepanel. Much easier to work with the
battery terminals towards the rear of the carrier (but still keep +ve under the sidepanel and -ve on the oil tank side) or use a
Motobatt with four terminals and use the rear ones.
. Beware sizing new cables based on the old ones. Original ones were 37 strands of one of two sizes; either is very inflexible compared to modern cable, the smaller size is too small for Amps sometimes drawn by the standard starter. I use
http://www.vehicle-wiring-products.eu/product.php/1030/battery-starter-cable, selecting "196/0.40 25mm sq. 9.8mm O/D, 170 Amps" in the dropdown under "Size:".
. I use
these terminals, "6mm hole" at the
battery, solenoid and starter, "8mm hole" or "10mm hole" depending whether you're attaching to 3/8" or 5/16" o.d. engine plate bolt; depending on the starter, one of the terminals might need opening out to 7 mm.
. If required, VWP will make
battery-to-solenoid, solenoid-to-starter and engine/frame-to-
battery cables to order.
. Standard harness has one or two thin Red wires attached to a ring terminal for
battery +ve. If you and your friend haven't seen the relevant NVT Service Bulletin, either tape the terminal and wire/s clear of the
battery terminal or only attach one wire with a 'main-size' (35A tubular, 15A blade) fuse in it. Another Red wires terminal is attached to one of the head bolts/studs through a rocker-box and, if the thick cable becomes loose or disconnected, using the starter will complete the circuit through the Red wires between head and
battery +ve connections ... or at least will
attempt to complete ...

. If your friend hasn't done it already, take the starter apart and give it a basic service - wipe off grease and carbon, small amount of new grease on the actual bearings, check brushes, etc.
. If your friend's bike still has the steel sidepanel and timing-side coil cover (attached to the front edge of the oil tank), he knows the only replacements come from T160's being broken, and simply various upper and lower limbs in exchange won't be enough? Because one coil cover fell off and got run over on the A30 near Heathrow years ago (oil tank screw threads stripped by over-enthusiastic dpo

), I've long used L.P. Williams Legend grp oil tank covers. However, I'm contemplating using LPW grp sidepanels too. Btw, the standard T160 sidepanel securing screw does work, as long as the sidepanel thread isn't worn/stripped and the correct part-numbered squashy grommet is in the frame hole.
If anyone has any photos of the way the harness is run and attached I would be most grateful as the bike did not have any wiring attached as a guide.
This suggests your friend has bought an off-the-shelf harness already? If so, pity; lack of a decent one in 1982 persuaded me to do my first rewire and I've yet to see anything that's changed my mind.

Nevertheless, ime best routing for an original harness was along the left-hand (drive) side of the main frame top tube, around the left-hand side of the steering head and in through the headlamp's central hole; the wires to the console between speedo. 'n' tacho. branched off between frame and headlamp. My first T160 came with the harness routed on the right-hand (timing) side and the White/Yellow wire between kill switch and coils (later Rita e.i.) failed in less than two years where the harness flexed around the steering head.

Otoh, my second T160 came to me at five years old with the harness routed as I've advised and White/Yellow wire still intact.
Hth.
Regards,