The modification is really quite easy. I first got the idea when I saw Tarkus, on the VROC newsgroup, discussing the modification of his shift lever. I never liked the little stock peg it (and most other bikes) came with, so I ran over to American Motorcycle Classics in Wendell NC and bought their big O-ring style 'Vibra-Kushion' shift peg manufactured by Custom Chrome (part #18-974).
The original peg was a one piece assembly, so I broke out the dremel tool and cut-off disks. A few minutes later, the original peg was lying on the ground. Then, I used the dremel to remove all of the weld. I finished polishing the new surface for the peg to set on flat, while trial fitting the new peg to make sure it was going to be "square" with my footpeg.
I then drilled and tapped the shift lever to 5/16" x 24 threads, and bolted the new peg on! What a difference in the feel of the shifter it does make. The new peg completely covers my shoe, and increased the "cool factor" substantially :-)