I just cut the ends off and slid them thru the rubber grommet. I ended up making my own harness out of a heavier gauge wire then what came with the projectors with that I put in a 9006 connector so I didn't have to "connect" to the projector harness.
In regards to your diagram...
This is going to be hard to explain... The 2 wires on the projector harness that go to the H1 (low beam), connect those two wires to the wire ends you have circled. Then the 9006 connector (the other one you have circled) goes to the ballast.
