Baglux recomends tank covers are treated with a waterproofer, which helps avoid the moisture problem. I give the cover a decent treatment a couple of times a year (and a clean too), otherwise a quick spray down the seams when I wash the bike.
I put a layer of polish on the tank and don't buff it off a couple of times a year too. The base of the harness is fairly soft so, if that is kept clean, it wont scratch your tank.
When you say "Is there anything else you would recomend for tank protection", do you mean just tank protection or protection from a Baglux harness?
If you just want protection and not a way to carry a bag, the only areas of the tank that will get scuffed are where bit rub against it (like knees or your bits!), why not try
http://www.invisiblepatterns.co.uk/paint-protection-film-yamaha.html or similar. Tank kit covers zip and knee area. You wont need the full kit, but this will stop stone chips in the fairing and lights too. The kit is almost invisable.
If you want to funk up the looks, MotoGrafix do a similar stick on kit with funky colour scheme (or they do for the Fazer, so I guess they do the FZ1 too).