Cheyne,
Mine did this and I did the usual stuff, made sure the cable was in good shape and lubricated it but the needle still bounced. I pulled another speedo unit out of another truck and when I compared the two I noticed that my needle was missing a section at the bottom (I couldn't see it until it was out of the dash). The missing piece has a small counterweight attached. I put the good needle on and it has worked fine ever since.
I'm sure this isn't the only thing to cause a bouncing needle, but it's worth a look.