getting the sensor mounted just right is tricky. i've got a cateye 3, and it took me awhile to figure out that their "5 mm" recommendation was a crock, and it needed to be closer to 2 mm or so. this makes bumps problematical, because a bump can knock the magnet just a little, thus screwing up the read.
if it's really quiet, you can hear the sensor 'click' as you pass the magnet by it. i do this before every ride, rotating the wheel so it goes back and forth, tick, tick etc. if it's missing ticks as the magnet goes by, i tweak it a little.
also, i can usually tell when it's wacked out when i'm riding. if i'm riding a steady pace, and the speed seems to be jumping back and forth between two different speeds pretty regularly (14 and 17 mph for instance), i know the sensor isn't picking up every rotation and needs adjusting.
ten years ago i had a computer on my mountain bike, and it was a pain in the butt too. the sensor technology is just pathetic, at least for the two different brands of computer i've tried. but the cateye works as long as i keep an eye on it.
oh, and the stated accuracy of these things is something like .1 mile per 10 miles, so it's never going to be dead on.