From what I've read from those who have done the conversion, the front is fairly easy. Basically raising the stock fender 3/4" and making some simple brackets for the brake calipers if converting over to 320mm rotors and newer brake calipers. A spacer may need to be made, also.
The rear isn't too bad either. Basically needing to make a bracket for the brake caliper and possibly make a spacer or two to make sure the chain and sprockets are aligned properly. If a low-profile tire is run on the rim (160/60-17), you have to make sure that the axle is in the rear-most half of it's adjustment to make sure that the center of the tire doesn't rub on the swingarm.
At least one person has swapped a Paso 907 swingarm on theirs, and a few people have had their stock swingarm extended 2"-6" (geometry and rear shock may need some work for correct handling). I'm working on obtaining a swingarm from a 750 that had the sprocket bolts work loose and grind through the swingarm. I'm thinking of getting it repaired and add a 2" extension. This will allow me more variety of tires and can run a slightly higher profile tire...if the bike's geometry and handling characteristics allow it.
Yes, those are the correct sizes, and right now, there is only one manufacturer and one tire available in those sizes. They are the Michelin A59 (front) and M59 (rear). I picked up a set for $195 delivered to my door off of eBay, which is one reason why I'm going to run the bike in it's stock configuration.....wear out the tires and get a baseline as to how the bike is supposed to handle before I go modifying anything with the wheels and suspension.
Talk to Kosman Specialties http://www.kosman.net/
about welding on a pair of 17" rims on your wneels. They did a GREAT job on the rear wheel of my Concours, now 17". I went from a 150/80-16 on 16x3.5 to a 170/60-17 on a 17x5 rim. The wheel was $495 delivered + powdercoating, for about $600 total.