There are two leads OEM - but some later model vehicles have three or four (so the aftermarket tries to cover all bases.)
1) The heavy lead does indeed go to the starter motor solenoid.
2) The secondary (smaller) lead would go to power distribution - use the larger of the two small leads, and either splice or reterminate PRN.
3) The smaller secondary lead (of the two) you don't need at all - but you may use it for an added accessory or somesuch, if you like. Or, just cut it off at the clamp.
I make custom battery cables, so I like to think I've got a pretty good handle on what's going on under there (and Gawd alone knows how many XJs I've worked on - all of them have only two positive leads from the battery + post, save possibly the Diesels. I haven't worked on a Diesel yet, they were only around 1985-1987 here in the States.)
"recon" (sic - reckon)(tm) "hihgly"(tm) "seceed"(tm)
"Outback AIDS - Alcohol-Induced Dizzy Spells"