Good looking bike.
Get signed up on this Yahoo group for your electrical questions http://autos.groups.yahoo.com/group/honda_clone
All Lifan engines are 12V so the previous owner probably changed the whole thing to 12V which is good.
The speedometer reads off the front wheel so it'll still be as accurate as it was originally.
Lifan engines aren't specifically made for dirt bikes or street bikes. The 125 will do very well on the street. You should maintain it just like the original Honda engine. I like to change the oil about every 1000 miles with 15/40 oil. Valves should be adjusted every 5000 miles or so. That's about it.
Chances a cop would know you have a bigger engine in there are very small.