there's some nice setups where people have fitted LEDs behind the rev counter so the gear is shown by the rev number if you see what I mean.
I like the Ardrino idea but also the LED behing the rev counter to indicate the gears, the usual 7 seg LED display tends to be expensive for what it is, might dig through my components and see what I can build :-)
Couple of hall sensors detect a magnet which will be fitted on the gear selector.
If it screams, wheelies, or conks out, you're in the wrong gear.