ah the gauge is good. i mounted mine right up on the dash close to the a pillar. it doesnt exactly like bounce around, but it vibrates between like the range you said. the motor feels like it idles fine maybe a little jump here and there, but im just guessing its the way the gauge was made now.
but you didnt hook up a tach adapter? and i just ran my signal wire through the grommet on the driverside which took like half the dash to be removed and fuse box. i spent more time trying to get a wire through the firewall, then wiring everything up. the tach adapter was so easy especially having a metal bracket on the firewall (in back of intake) i was able to mount it on. coil 12v wire was right there so it was an easy splice.