Well the top part of that sensor, the actual electric part if you remove the two bolts there should be a little pin insid that has two tabs on the side. That engages the gear when driven to the actuall electric part. check that.
Personally i would put your old one in because i think there isn't anything wrong with it.
Heres why i think this. I didn't here you say that the check engine lite is on. When the VSS goes or acts eratic the PCM would pick that the sensor is dropping out and turn the light on and store a code. Usuall it just stops altogether. I would be 99% confident in saying the problem is the speedo and not the sensor.