Is your tach pointer jumpy only at idle? This may be due to a 4 cylinder 1 or 2 pulse calibration setting. A little jumpiness at idle is considered normal in this case due to the low frequency signal generated by this ignition signal type at idle. A fluctuation of this type at low engine speeds is a trade off for an extremely quick and smooth reaction at higher engine RPM (where it really counts!) on these types of ignitions.
If the tachometer is wildly erratic or jumpy all over the scale, it could be due to in-correct installation or because you are running a Magneto type distributor. If you are running a Magneto, you MUST make sure that you are using suppression core spark plug wires. A classic symptom of using solid core wires with a Magneto is a jumpy, mis-reading, or erratic pointer. This is especially evident when revving the engine or placing it under load. Good quality suppression core plug wires will usually help or solve the problem without a negative effect on ignition system performance.
The issue could be related to a noisy ignition system. Sometimes we have a great deal of luck by putting a 10k ohm, 1/2 watt resistor in line with the signal wire. Check out the video here for more information: