1994 Chevy Truck Speedometer going crazy causing tranny pro

My speedomter is going crazy while i'm driving. It never goes under wat I am actuallly going but it will peg out at normal speeds. This porblem seems to get worse when I turn my cruise control on. Now the bad part. Whenever this happens, my transmission starts to shift out of gear and the engine revs up, then it will catch again and so on. Now even worse, I know alot about cars and figured it was the vehicle speed sensor, so I replaced it, and I am still hving the same problem. Please help!