Floating the ground on a DC system means that all ground wires are attached to a continuous circuit (wire) that leads only to the negative terminal of the battery. No ground leads within the system are attached to the frame.
I rebuilt the electrical system on my XR650R initially to provide regulated, steady state, filtered (battery) DC power for an Acewell 3700 computer. Since I rewound the stator with only a single output, I decided to run all electrical accessories on switched DC power (55/60W headlight, LED tail/brake light, horn, and computer). Dan Regalia from Baja Designs recommended not trying to use the AC power before the regulator (to power the headlight, etc.) as this would all but cancel out the DC power from the regulator. I went with his recommendation.
Guess it all depends on how you want to set up the electrical system on your bike for your specific needs. With this setup, the headlight provides full brightness from idle on up and will stay on without the motor running if needed.
More information on AC to DC conversion can be obtained from the Trail Tech website (From AC to DC - Key Concepts).
Once again, this is only how I chose to set up my system ... I'm not saying that it's the best, but it works for me.