Marsvar - I installed a magnet on the front sprocket bolt by adhering it with some epoxy and drilled a small recess in the head of the sprocket bolt. Then, on the underside of the sprocket cover, I welded a small tab of metal parallel to the cover, but hung it off the sprocket shroud. It looks like a small metal ear that gave me enough area to locate the sensor exactly opposite the bolt.
Then I drilled a small hole in the tab, installed the sensor and double-nutted it to secure it. Now, as the sprocket rotates, it passes the sensor.
http://www.cmsnl.com/honda-cb550k0-four-1975-usa_model465/partslist/E++04.html#resultsBasically, if you look at part number 2 in the diagram, I added a small piece on the inside of the right hand side, to the left of the large hole the shift shaft passes thru. If it weren't pouring rain, and I didn't have so much to do today, I'd snap a picture.
The wiring runs along the underside of the cover, loops back around to the motor, then joins up with the Neutral and Oil pressure wiring, and up to the gauge. This allows a perfect register for the speed sensor, and you can adjust the WHEELSIZE parameter on your MG to fine tune your speed setting. I clocked my bike against my car's cruise control at 30. 40, 50 and 60MPH. I found that 5mm of parameter adjustment worked out to about 1 MPH correction.
The only think you need to be wary of is the distance offset from the sprocket. The sensor needs to be within a certain proximity, so you must locate the sensor in two planes: laterally to register, and distance from the sensor so as not to contact the sprocket, took a bit of fiddling to get it perfect. I think on my 500 build, I will install the sensor
before I put the motor in the frame this time, or at least locate the darn thing. It would be much easier to do with no frame in the way.