Problem solved!
I bought a new sensor from BMW (£18) and cut the old one apart, only to discover that it's a common or garden reed switch.
There are two types of speedo offered by Caigauge. An older type which is adjusted by the means of 'DIP' switches, and a newer type which is adjusted by a code fed into the LCD display.
The Caigauge website gives you the installation for both types of speedos and the wiring.
Looking at both wiring guides made more sense that just the one supplied.
I wired the two wires from the sensor, one to earth and one to the speedo head.
Because the speedo is looking for a pulse, earthing the sensor produced no pulse for the speedo (obviously).
By swapping the earth for a 12v feed the problem was solved.
So yesterday, with a working speedo, we trotted of to a place (For Dorset people,the road running past Monkey World near Wool) where the local police check their speedos by the means of mile markers and got the speedo dialed in.
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