Having delt with the rr problem on my 98, I'm still curious as to what happens.
My experiences all point to the connector from the stator to the rr. I've owned my VFR since new and have ridden it 20,000 miles in most types of weather. My suspicion is that over time, the connector gets some moisture from the atmosphere which inhibits a good connection which creates heat which melts plastic housing.
I replaced my original rr last October 07 with one from Electrosport. I had to break the connector getting it apart and ended up replacing the burnt terminals with new ones... no problems during a 4 day, 1500 mile trip. Being the consumant tinkerer, I keep looking for causes and effects. I got a 4 unit Batterytender which I keep hooked up all the time (I also have an SV650 and a VTR). While trying to keep an eye on things, I probably created a poor connection at the terminal block and it ended up melting completely. A call to Electrosport indicated that they were redesigning their rr and would get it off to me ASAP - 2 months went by with no rr! To cure the connector problem, I could either solder the 3 yellow stator wires to the rr or.... use Posi-Lock connectors. I'd seen them reviewed on WebBikeworld (a great site btw) and decided to try them. So far, no issues. I also mounted a small CPU fan to the rr which reduces it temperature by about 20-30 degrees.
Have I fixed the problem? I don't know yet. I haven't seen the fuse or the associated link overheat either.
Mac Morgan
Hockessin, DE