How can I tell if the charging system is working
It is possible that your dynamo needs polarizing if the pointer is bouncing about. To polarize the dynamo you will need flash the dynamo. To flash the dynamo disconnect the dynamo leads and connect a lead to the battery (connect the lead to the battery -ve terminal if the bike is positive earth or to the positive battery terminal if the bike is negative earth). Touch the other end of the lead on to the dynamo "F" terminal for a second or so. The battery will now be polarized. The reason you might have to do this is because if the dynamo has not been connected to a battery before, then the residual magnetism in the field will be to weak to initiate the charging cycle.
1) To test dynamo output set your meter to DC 20 volt range.
2) Join dynamo output leads together (F and D) then connect meter +ve to the leads and meter -ve to earth. Start engine and read off the voltage.
To test if charge is reaching the battery connect meter across the battery read off voltage, then with the engine running read off voltage again.
If the battery is fully charged then the ammeter will not really show much of a deflection towards + side of the ammeter with the engine running until a load is placed on it such as switching on the headlamp. Initially on switching on the headlamp the ammeter will show a discharge. If you increase engine speed the ammeter pointer should move to the centre indicating that the dynamo is balancing the load.
Hope this helps
John