While a ground wire might not be absolutely necessary, it's still a good idea. The regulator base has rubber grommets for vibration isolation, not electrical insulation. I'd suggest running a moderate-sized ground wire (#14 or so) from the regulator housing to the engine block somewhere- - - -it doesn't necessarily have to go all the way to the alternator. That assures that rusty body mounts, missing engine-to-frame ground straps, etc. don't insert any resistance in the circuit between the alternator and the regulator. BTW- - - - -trying to keep the engine running with a battery cable disconnected does things to sensitive electronics- - - -like killing an ignition module. Just as the circuit is broken, voltage spikes can go as high as 100 volts or more, and solid state electronics really hate voltage spikes!
Jerry
Edit: If the negative battery cable is attached to the engine block, like it should be for a good starter circuit, another ground for the alternator/battery circuit isn't required. If the negative cable grounds to the frame, you need a BIG ground from the engine to the frame, a #4 cable or bigger.
Jerry
Last edited by Hotrod Lincoln; 12/18/2009 3:25 PM.