OK Patrick, I'll try and help. Firstly, it makes no difference to the wiring if your bike is Pos or Neg earth. Although they were built Neg earth and you can easily change it and we can discuss that later if you want.
Your switch should look like this (With the brass wings) and I have blown up the switch diagram to make it easier to follow.
Your pilot bulb should connect to terminal 4 and you should have the short loop wire between terminals 3 and 7. It's this loop wire and the action of the wings that switches your pilot light off but leaves your tail light on (Terminal 1).
The only difference to this digram concerns if you have a twin filament headlamp bulb with a dip switch. Then the cable from terminal 2 goes to your dip switch and the other two wires from your dip switch go back to your bulb. Ron
email (option): ronpier@talk21.com