Not sure if the 07 is the same as the 06, but mine suffered the same insulation breakdown and then shorted out the supply.
The speedo on mine works off DC voltage and the generator is making AC, so just behind the headlight is a capacitor and a diode, which half wave rectifies to provide DC.
More on AC/DC can be found here
http://www.youtube.com/watch?v=H33vSYapNNs 