I just got an 03 VFR800 rode it for a week and the wire connector from the stator to the rectifier melted and stared smoking. Is this common and what does it usually turn out to be?
Common is an understatement. You're not a real VFR owner until your R/R has cooked your wires. See this link. Contains all sorts of good info. http://vfrworld.com/forums/showthread.php/45019-Stator-Issue Separately, note the 2002 to 2005 models had a recall done on a wiring harness (somewhere in the front of the bike). You should make sure that's been done. A call to any Honda place with your VIN should reveal whether or not its been completed.
Common all gens......... Of any two yellow wires touch due to melting, it fries the stator instantly.