Sorry to answer before Mister DanB has a chance to, but here goes : The idea is to have some leverage to yaw the generator and blades away from the wind when there is too much of it. Without the generator body having any amount of offset from the center yaw point, there is no force to move the generator and blades off from the wind direction. Just like when we drive a car, how can we turn a corner without the steering wheel ? Yes we can try to turn the rod or shaft in the center of the steering column, but this is hard believe me, I have seen guys doing this before, but you can break your fingers before the corner is turned ! The forces required to turn in this case is just unreasonable. The wheel of the steering system is that leverage becuase the rim of the wheel has some distance away from the center column, the circumferance is sizeable comparing to no circumference. The principle here is the same as offsetting the generator from the yaw point.

If the generator is too large and you worry about the forces effecting on the yaw bearing horizontally, how about a vertical furling mechanism Fred ? Could you use that ?

The operation was the same, the tail was spring loaded and large enough to be effectively anchored in space. When the force on the control vane exceeded the restoring force on the spring, the head rotated out of the wind.

It was a logical development to offset the propeller axis to produce the control force without the extra vane.

It was also logical to use the self closing gate idea to replace the spring.

If you dislike the offset alternator, the control vane works perfectly well, just looks a bit odd.

Regarding vertical furling, it's a nice idea in a perfect wind, but in a turbulent wind, as the tail yaws one way and the other, the gyroscopic force produces a force causing the alternator to lift or drop and the thing slams up and down like a jack in a box.  The cure is a yaw damper, but that is difficult and the cure normally adopted of using a damper on the vertical movement may make it workable, but I once tried a small one and would never do it again.  Perhaps larger machines are better just as large side furling machines seem better behaved.

"I noticed the hole in the top of the post( is this were the wire goes?)"

Yes... exactly.  The line drops through that hole and through the whole tower.  I put a hole at the bottom of the tower for the wire to come out.

"I always asumend that you would need some kind of slip ring to transmit the power from a movable generator into a stationary pipe or tower."

No... you don't need it, though many machines use them.  It does complicate things however.  If you build slip rings  - they have to be reallly well made.  If they fail - the machine will overspeed with no load and it could result in a total failure I think.  Slip rings will add some some resistance, theyre too small theyll get hot - they require a precision fit where the machine rotates on the tower (I dont think a simple pipe over pipe yaw bearing would cut it).  Certainly you could do it - it'd be a lot more work and Im doubtful that in most cases it'd be more reliable.

"If the mill turns on the axis of the tower, surely the wire would become twisted and broken. I have found no mention of this in Huges book. Am I missing the obvious?"