Yes Erik thats the easiest way to do it, there will always be the problem of sync between the two, I will solve it as follows:
If time window ended with no pulses, this means speed is zero, if i get a falling edge of a pulse in the time window I will start the timing window from this falling edge and count pulses. Of course I would take more than one timing window to confirm that it wasn't a glitch.
As Kai suggested i could do it by analog method but since i have to use a microcontroller for other things I might as well make the microcontroller do this for free.
I still haven't decided on which micro to use, I need to build about 200 units as a start and program each microcontroller in my home made programmer.
Can You suggest a cheap microcontroller which can be programmed easily with nothing fancy, just timers and i/o ports.
Regards
Mahmood