Pretty much all regulators/vaporizors now days come ready to plum in water,I usually pull water off the back of the head. I always run water as it keeps the regulator from freezing which causes a lean condition and eventually will cut fuel flow. Keeping it warm also helps keep down mercaptane/tar build up in the system,you can also buy a thermostat that goes in line to warm the regulator faster and hold a specific temperature but its usually not required.
I have converted air cooled engines but regulator placement gets tricky.
The valve that cuts fuel is the lock off,the one with the hose is a vacuum lock off,Impco VFF30 is the most common. Apply vacuum and it turns on,take it away and it turns off.
You can also run an electric lock off that gets power off the key switch,these are also usually ran through an oil pressure switch as a saftey. For added safety some systems use both vacuum and electric in series.