As far as the notching on the clutch basket, that's a common problem. I recently rebuilt an FZR600 with this issue. I just filed the grooves on the basket smooth and it worked fine. Not the most elegant solution, but it made the the engagement action much smoother.
Regarding the use of ATF, you...
Funny how folks start arguing about one "lightweight frame" being better than another when you're putting a boat anchor of a motor in it. I have nothing against Buells or any Harleys, I'm just saying if you're putting a harley motor in a lightweight frame, then you're trying to get "performance"...