I purchased an '89 that has these problems:

1.   Engine isn't charging the battery, but it'll charge from a battery charger.
2.   Front forks have specks of rust on them.
2a. Fork seals have leaked, spilling fork oil onto the front brakes.
3.  Front brake doesn't grab as well as I'd like.
4.  The sides of the tail are scraped up badly.

My repair thoughts:

1.   Follow the tutorial in the FAQ section to determine if the problem is the alternator or the voltage regulator.  Replace the bad part.
2.  Steel wool the rust off of the front fork, then replace fork oil gasket and fork oil.
3.  Replace front brake pad since the current pad has been soaking in fork oil.
4.  Look for used tails, and repaint the new tail along with the tank.

Does anyone have any thoughts on these repairs?  Anything else I should do? 

4: It would be a lot cheaper to use body filler and sandpaper before painting, avoiding expensive new used plastic. Tedious, perhaps, but any good paint prep is...

Inspect all rubber hoses (including brakes); replace any that are hard, brittle, or cracked.

Charging system:
http://gstwins.com/gsboard/index.php?topic=38480.0

Replace the fork seals.  Now is a good time to change the fork oil.  Use a little polish on the specks of rust to make sure they're just surface specks.

Bleed the brakes.  Check the pads.

Don't worry about the scrapes until the bike is perfect mechanically.  Then take it off, scuff with some 400 grit sandpaper to an even dullness, wash, dry, and rattlecan with many thin coats.  Enjoy.

Rust in the travel area of the fork = Death to the seals. You cannot imagine how many seals the leaky forks will kill. 1000's and 1000's of them have washed up ashore dead when the forks on the exxon valdez got rust and leaked into the ocean. Baby seals too. Murderer ... 
Cool.
Buddha.

I hear rust on the forks killed Laura Palmer.

Buddha,

You have stated that GS500 forks are rust prone, and you advocate going to Kat forks.  Is there anything that can be to keep the GS forks nice and silver?  Would hitting them with steel wool or car polish every few months help? 

With the pressure and the scraping action by the slider bushings etc etc ... rust will never get treated in that location. Heck I prefer bent to rusted.
The GS forks twist due to single disk, the steel that was in the fork legs is a POS and the chrome is also very poor. To top it off it had massive travel and rust even near the lower triple has the potential to be fatal.
Anything you do to it, is like fitting a bandaid on cancer.
Cool.
Buddha.