Q&A

Older cars used to use a speedometer cable. The 1995 Jetta (1.9L and 2.0L) 4 cylinder engine both use a Vehicle Speed Sensor (VSS) on the transmission. It is an electrical pulse generator, the faster you drive, the sensor generates a higher signal frequency. Failure of the VSS should cause the "Check Engine" light to illuminate while you are driving, as the engine's computer uses the vehicle's VSS signal to control the transmission and fuel requirements of your car. If the Check Engine Light has not come on while the speedometer is acting erratic, check to see if the cruise control works properly as this too uses the VSS signal. If the cruise control works, the Check Engine Light is not on, and the speedometer still reads erratic perhaps the problem is in the speedometer itself. This would require removal of the instrument cluster to change. The VW scan tool communicates with the VSS and can tell if it is working correctly or not.

Since your check engine light is not on and everything else that uses the speed sensor signal is ok you may well have a problem in the instrument cluster itself.
A good place to start would be to remove the instrument cluster and confirm all the connections at the cluster itself. Inspect the wiring and connectors as well as the physical attachments at the cluster.
If you have a wiring diagram and digital multimeter or scope you can confirm a steady signal at the cluster. You may have a failure at the instrument (speedometer) , or simply a poor connection.
The speedo signal can be monitored with a scan tool as well.
Often the act of disconnecting and reconnecting the instrument cluster will restore operation.....

hey. spyder. how can i check it using my digital multimeter???

The answer to this problem is in the solder points on the speedometer to the circuit board four points. Check to see if the solder is in tact and resolder either way, if they are loose or not. If this does not resolve the problem the instrument cluster is shot and replacement can be done through Car-part.com for a minimal cost. I am assuming you can remove the instrument cluster in the dash and remove the screws in the cluster to access the circuit board. Hint: the steering wheel does not need to be removed as Chilton claimed, but I would remove the battery negative cable before starting. Good Luck Scrappy