There is only one kit.
It comes with the spacer and the directions say you use the spacer if you want it lower. 
Greg, I don't know for sure because I don't use the Progressive stuff, but there are two different kits listed, with two different part numbers, and two different prices. My understanding was that one kit was for "standard" height, and the other kit was for 1" lower front end..
Fireguy...if you are talking about the HD "Premium" cartridges, I only know one person who has installed those...Jerry (Ultrafxr) and he is happy with them. Your RG should have the standard height front end (though it's a POS stock), and a 1" lower rear shock (12" eye to eye). This is my opinion: If I did not have special needs for height, due to being vertically challenged

, I would purchase other shocks rather than anything HD has to offer. Anything HD puts on a bike with regards to suspension is going to be low bid product. While the adjustable shocks are "better" than the "air ride" (which are not really air ride at all) from my understanding, they are not as good as other products available for the same money. And for a bit more money you can get a product FAR superior to anything HD markets. Ohlin, Bitubo, Works, Suspension Tech, Progressive...I'm sure there are others, but those are the one's that have been proven by owners here. The best rear shocks have 3 adjustments: Preload (spring compression), compression damping (some have adjustments for this setting), and rebound damping (again, some have adjustments for this as well). As you decrease price, you lose adjustments accordingly. And then there are products like Legend Air Suspension, which are infinitely adjustable for any load or riding situation with regards to preload, and adjustable "on the fly".
You want the ultimate in front suspension? Traxxion Dynamics AK-20 cartridges. None better...period. But you'll pay for them.
Whatever you do, it sounds like you definitely need a suspension underneath you that is both full height (13" rear shock) and better than stock. I have been known to ride pretty aggresively in twisties, but have never scraped anything other than the floorboards....however, I've got $2500+ worth of suspension under me. The stock suspension, again IMO, is not only inferior, it's dangerous in many ways. HD should be ashamed for putting such chit on their flagship bikes, but it is what it is.
It is VERY unusual to scrape the heat shield without seriously scraping other parts first. Scraping floorboard support brackets is a recipe for real problems...