So i bought this digital lcd speedo from ebay, but my question is why did it come with these magnets, and how do you wire in an rpm wire(purple) for the bike since isnt it a cable like the mph? and anything else im going to have to deal with i have a 93' gs500. thanks

The RPM might be a bit of an issue. the later models that have the an electronic tach it would be easy to hook up.. but these older ones, I'm not saying its impossible, I do believe there is a way. but I'm personally not 100% sure.

The magnets are for the speedo sensor - one magnet headed bolt goes in a brake rotor bolt, while the pickup mounts to the lower fork leg.

And the tach wire can be wrapped around one of the spark plug wires if I remember correctly.

I think GS500Schultz installed a similar one on his '89. He may be able to provide some advice.
Check out his thread here:
http://gstwins.com/gsboard/index.php?topic=68105.0

When I did my acewell gauge the speedometer was like you have. I epoxied the magnet to the rim and placed the sensor to a bracket I made to bolt to the front fender.

The tach was a wire that wrapped around the spark plug wire to sense when the plug fired. I believe my tach wire was yellow though.

How are you making out with the install?  I installed a similar gauge on my GS and it took a bit of trial and error but I managed to accomplish a proper install and it is now working very nicely.  A GS wiring diagram and schematics for the gauge wiring are a must.  In case you haven't figured it out yet, you will have to mount on of the magnets to your brake disc and find a way to mount the bolt so that the tip lines up with the magnet as the wheel rotates.  It should be within a few mm in order to be accurate.