Incandescents do flicker on the Lister to many peoples eyes, and will do so a whole lot less if you have a good external regulator on your ST head or use another head with a good regulator. This will minimize the voltage variation. I know, I've done it, and measured it. It will be better with heavier flywheels or a faster engine rpm, also. Flicker is also reduced slightly by higher wattage incandescents.
Adding a capacitor the the AC output won't affect the engine power stroke speed variation caused voltage variation of the stock ST genhead one bit. This speed variation is only happening at 5.5 Hz and if you tried to filter that via passive filtering you'd have no 60Hz AC left. Go good thought, but not for this slow AC phenomina. The external regulators CAN respond fast enough to reduce most of this, as Sanchez has reported, and I have also measured on my ST w/ external regulator.
For people who are very flicker senstive, even an external regulator may not be enough, as there is still some AC frequency variation with the variation of engine rpm from the power stroke. It's not enough for me (I have epilepsy).
In this case, you need to find compact fluorescent bulbs that regulate the output voltage to the compact flourescent light. These best-for-no-flicker designs take the incoming AC, rectify it to make high voltage bulk DC, and then generate a high frequency AC waveform of regulated voltage from the bulk DC. This takes a bit more circuitry but will solve your flicker problem, as it's like having a little inverter right there in the CF. Some of the newer CFs will do this, and some designs won't.
A listing of some specific CF bulbs that seem to work well (for people bothered by flicker of incandescents on the Lister) woud be helpful for folks or their family members bothered by flicker. I don't tolerate CF light quality or their RF/EMI so can't help with that. Maybe RZRBAX can help by providing some specific brand and models.
Good tips, Sanches, on the Yanmar head and also on the Kubota regulator for the ST. A model/part number on the Kubota regulator would be very helpful to others, if you can find it. Most guys aren't up for building a DIY regulator as I did.
Bruce M