I didn't do the conversion,
I didn't do the conversion, but the pictured bike is now in my care. You should be able to see the driven wheel actually mounts to the conversion kit - not the front fork. The kit offsets the mounting to the outside. You actually have more of a problem moving the old narrow front hub to the wider rear dropouts. Spacers are required there.
There is another area of interest with this conversion. Unless you are converting the Cannondale Headshok to a standard 1-1/8" stem (the Headshoks are like 1-9/16" dia, and once they wear out they are a pain to deal with), there may be some fabrication and welding required to mate the Cruzbike stem to the (inverted) Cannondale stem. I can make you some better pics of that area once the bike gets back from the shop*. Whoever did mine did a great job.
The seat mount on this frame can be interesting too, due to the slantiness of the "top" tube. Ron's pics showed this pretty well.
*Speaking of getting bike back from the shop, it's there to get its mountain triple with 175mm cranks changed to a road triple with 170s. The original mountain bike gearing is too low for how fast it wants to go. It was good for learning on, but I never once used the granny and rarely left the big ring. I still haven't learned how to pedal at downhill speeds!
Good luck with your conversion. This is the only Cruzbike I've ever ridden - I bought it for a lark just to see what it was like - but I am really enjoying it (enough to put more money in it anyway).
-Dan