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Sounds like the sending unit has an intermittent short to ground. Unhook the the wire from the sending unit, and see if the needle stops jumping around. If it quits jumping around, replace the sending unit. If it still jumps around, you have a bare spot somewhere on the wire and it is hitting ground which will cause the needle to jump. Cut out the bad part of the wire and splice in a new section. That should fix it.
This condition can also be caused by a bad set of sparkplugs and or a bad set of ignition wires, I would change these first and if the problem persist ,,Flush the injectors ..
I had the same problem with my 1995 Honda Accord V6 2.7L a year ago. It was a pain to have Honda diagnose the problem because it was intermittent and every time I took my car in to the dealership they said they couldn't reproduce the problem, but the longer you wait the more frequently your tachometer will fluctuate. I finally stopped by the dealership when the tachometer was jumping and they were able to diagnose the problem. In my case there was a faulty resistor in the ignition coil, but the entire ignition coil needs to be replaced. I don't know anything about cars but I know this fixed my problem. I went directly though Honda's service center so I know they charged me more than an independent repair shop but I'm looking at my invoice now and I paid $150 for the ignition coil and $200 for labor. After Honda diagnosed the problem I searched for "1995 honda accord ignition coil tachometer" and found that other people had the same problem and replacing the ignition coil was the fix. Hope this helps.
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