remember, if you rectify the 40 watt output to convert it from AC , which is what it puts out, to DC, you will lose even more watts - you will go from 40 down to 30 or 35 at best. You cannot run a battery unless you convert to DC by using a rectifier. Now, there is nothing wrong with running straight AC as it comes standard. Your 35 watt halogen light will run fine on AC. Using an LED tail light will be crucial - the Baja Designs LED tail light also runs fine on AC and only pulls about 1 watt. You will still want to run a regulator, which keeps the voltage at 12 and prevents spiking, which would blow your bulbs. For your horn, use a battery powered bicycle type horn , like the megahorn - uses a single 9v transistor battery. A normal DC motorcycle horn pulls 20-25 watts, and you don't have those to spare. Oh, one more thing - the lighting output is totally seperate from the ignition output, so the coil does NOT pull any of the available watts from the lighting circuit.
you might want to check out the numerous posts I made on thumpertalk under the YZ450 section regarding electrical setups for my street legal 07 450. I even posted a wiring schematic.
any other questions let me know, and I'll be glad to help.