Cruise Control Question

I took my 'new' '89 525i on its first 800 mile road trip. It did well (22 mpg going and 25 mpg returning). The cruise control is not working properly though. The speedometer is sometimes erratic and then, when trying to use cruise, the car surges. I think this is because of the speedo. How do I cause the speedometer to read correctly? I am thinking about crawling under the car and removing the speed sensor from the rear-end and cleaning it to see if this helps. It won;t hurst anything I suppose. Any other suggestions or ideas? Does anyone else have the problem with the erratic speedometer?

Thanks

Paul
'89 525i 127K miles