Hello - Last year with my students and I designed a PCB for a US1881 Hall Latch. It has done very well for us. To use it, we just mount some good magnets in a hub, 180 degrees out of phase and at opposing poles. Each pole swap during rotation swaps the latch, creating a square wave on the digital signal. We have tested it up to about 5000 RPM on our shooter last year and this year. I am not sure how high it can go before missing latches, our goal was <= 5000 RPM, but the US1881 data sheet probably tells you. You need to make sure those magnets in the hub are secured well, you don't want them flying out!
For the magnets we have had great luck using the larger of the 2 magnets that spark fun sells. The smaller works too, but the larger one allows the sensor to be between a 1/4 and a 1/2 inch away from the magnets/spinning hub.
We actually just shipped 3 units to another FRC team and sold a few last year. If you are interested, private message me and we can hook you up with some for $20 a piece for an assembled sensor, you supply the magnets (we did a short run on the boards so they weren't cheap).
Here is the thread from last year:
http://www.chiefdelphi.com/forums/sh...92#post1114292