When I had my 87 300E, I had the same speedo needle jumping problem. A Benz technician told me what the trick was.

Disconect your speedo cable at the transmission. Apply a good blob of standard grease to the cable end. Reconnect the cable.

Because of the way the cable rotates, the grease will be pulled up along the cable to its end at the speedometer. The new grease should stop your jumping problem as it did mine.

10 min. 15 cent fix.

Marc
1999 C43 AMG (for 1 hour) (to return in August)
1987 300E Obsidian Black, Palomino Interior (traded in on C43)