New alternator installed

Well I just installed my new alternator and it works fine...but now before I add any amps, I have to upgrade the wiring...but that's where my problem lies... someone told me that thering terminal on the power wire cannot touch any part of the alternator case but that little post that says battery...they said that because the alternator case is grounded to the chassis this would be a bad thing if the bare ring terminal were to rub against the alt case...it sounds logical to me...is it true...I'd like to save myself from a major mistake before I change the wiring.

Also...on a 4runner there is the regular ground wire to chassis and a little 10 ga wire that goes frm the battery - post to the sheet metal which is like 2 inches away...do I need to upgrade that also...?

Do either of you have 4runners...?  I'm asking because I can only see the one ground wire from the battery negative terminal to the chassis (and of course that little wire),  and the positive to the alternator....but I keep hearing people say to change the big 3.  What's the 3rd wire people refer to when saying replace the big 3...?

Your 2 inch piece of wire is meant to handle the amount of current generated by the factory electrical system--if you add a very big amplifier (uses ~60A or more) it would probably be a good idea to upgrade. You can never have too good of a ground.