As for your speedometer jumping around, check your Vehicle Velocity Sensor (VVS). Inspect your wire harness leads which is located on the drivers side by the transmission tail shaft, if the wire leads and connection are good. Your VVS may be on it's way out and will need to be replaced.
The other thing to is there is a TBS GM has had a issue with the clusters in the 2003-2005 trucks. The cluster will be replaced for free for your truck if it has less then 70k miles. I would take it to your local dealer and tell them that the speedometer gauge sticks at times. They should order one for you, takes 1-2 days and replace it for you at no charge. If this does not fix the problem, you will have a new cluster at no charge. This is a copy of the GM bulletin.
#07187C: Special Coverage Adjustment - Instrument Panel Cluster Gauge Needle Function - (Mar 20, 2009)
This special coverage covers the condition described above for a period of 7 years or 70,000 miles (110,000 km), whichever occurs first, from the date the vehicle was originally placed in service, regardless of ownership.
Dealers are to replace the instrument panel cluster after the condition has been verified. The repairs will be made at no charge to the customer.
For verified failures between 70,001 miles (110,001 km) and 80,000 miles (130,000 km) on U.S. vehicles, dealers are to provide the customer with an instrument panel cluster (IPC) only. Any additional costs, including labor to replace the instrument panel cluster, will be the responsibility of the customer. Dealers are responsible for the return of the customer's IPC back to the Electronic Service Center.
For vehicles covered by Vehicle Service Contracts, all eligible claims with repair orders on or after September 28, 2007 for 2003-2004 model year vehicles, and March 23, 2009 for 2005 model year vehicles, are covered by this special coverage and must be submitted using the labor operation codes provided with this bulletin. Claims with repair orders prior to September 28, 2007 for 2003-2004 model year vehicles, or March 23, 2009 for 2005 model year vehicles, must be submitted to the Service Contract provider.
Involved are all 2003 and 2004 model year and certain U.S. 2005
Cadillac Escalade, Escalade ESV, and Escalade EXT;
Chevrolet Avalanche, Silverado, Suburban, and Tahoe; and GMC Sierra, Yukon, and Yukon XL vehicles built within the following VIN breakpoints: 51100014-51247028 / 5E100002-5E223209 / 5F800001-5F882297 / 5Z100003-5Z224691
As for the turbo charging kit, you can log on to this link
http://www.cartuning.ca/products/ and they should be able to help you modify there 6.2L turbo kit for the Escalade to work on your 5.3 Sierra by dropping the boost pressure with a simple waste gate swap. Yes they can Dyno tune your ECM for the extra Boost, if you keep the boost around 6 PSI, you should be good to go without any ECM tuning, but you are going to have to do some modes on your transmission. At 6PSI, that should give you another 30%HP to what you have at your rear wheels. Power output is 285-295 hp stock so your looking at 370-383 HP with an intercooler. Good luck and give and give Cartuning Performance a call.