Guess I disagree with Iowegian based on my experience with bottle and bottom bracket dynamos. I've never had a problem with the ground connection that's made through the frame of the bike - any wiring issues have always been associated with the separate wire and I see no reason to add a second wire between each light and the dynamo. If the existing wires are in good shape then just hook them up to the terminal of the dynamo (some have only a single connection for both tail and head light but it looks like yours has separate connections for each. You also want to make sure the dynamo mechanical connection to the frame makes a good electrical contact - some use a small set screw that cuts through the paint to assure a good contact.