You can lower the rear by either:(i) putting shorter shocks on. (The lowest rear shock you can put on a Sportster is 10 inches. I recommend 11 inches, it's plenty low enough).
The bike pictured had 13 1/2 inch shocks as stock, it now has 11 inch chrome covered heavy duty shocks.
You can also put on struts (thereby hardtailing it).
(ii) put a rear lowering kit on. This is way cheaper than buying shorter shocks, and makes use of your existing shocks. It moves the bottom of the shock further back, thereby lowering the bike.
You can lower the front by several different kits/methods: some change the springs, some change the dampers. Some are much quicker and simpler to do, some are cheaper than others, they all do the trick.
Harley Davidson and some suspension specialists recommend lowering the front and rear by about the same amount. This is debated somewhat - even Harley themselves made some Sportsters (the 'C' models) lower at the back but kept the same length forks at the front.
After lowering, you must put on a shorter kickstand (minus 1 inch type). Otherwise your bike would stand up too straight on it's stand and could fall over.
