The speedohealer intercepts the signal coming out of your bike's speed sensor, calibrates it depending on the the values you program and then sends it along to the speedometer for display. It stays permanently attached to the bike. Install is pretty straight forward. The SH comes with plug and play harnesses for most newer bikes. The only thing I had to do to my R1 was find a suitable external power source. I tapped in to the rear license plate light.
As far as the discrepency, every bike is a little different as far as the speedo error is concerned. Also, if you change sprocket ratios that will throw off your speedo as well. Even the difference between brand new rear tire and a bald one will have an effect on your speedo accuracy.
The nice bonus of the SH is that it has a top speed memory recall as well. For $10 more than the standard SH, you can get a remote mount that allows you to install a button in the cockpit that will recall your top speed conveniently.
Finally, the SH Version 3.0 non-remote top speed recall costs $89.99 and can be had from one of SBN's very own sponsors, Cal-Sportbike. Let them know you are a member of SBN in the "How did you hear about us?" comment section and they will ship you the SH for free.
Not affiliated with SH or Cal-Sportbike in any way. Just a satisfied customer.
Hope that helps!