Yeah, hall is all I really want to use and much easier to interface with the Megasquirt as the protection circuit is super simple. What diameter is the sensor you have in that picture? I have one other old one from kart racing sitting in my basement that's smaller diameter than the tab style one I was planning to use, but also a fair deal longer I think, so might not fit as well. It might actually be a VR sensor too, I'm not sure. I think it had to read off a magnet though, so it might even be more like a hall reed switch.
I think the other interesting thing to know on the Megasquirt is how exactly it measures speed. My college cruise control project back in the day was extra simple because the processor I was using couldn't do interrupts and had limited math capabilities due to number size variable restrictions. To measure a speed I had to count pulses for a fixed amount of time and then do the math to convert that to a speed, so resolution became much more important because the difference of one pulse in the short period I was measuring was the difference of one full tire rotation on my original design. A system that just counts the time between pulses and extrapolates that to a speed is probably going to be less sensitive to tooth count, but still a bit less accurate at very low speeds. Again, maybe not enough to matter anyway, and any speed sensor on the front is going to be better than no speed sensor, so I'll likely just have to take what I can get.