I don't know anything about that particular display, but a digital tach display can be as stable as the designer wants. Remember that a digital display is almost always driven by a micrporocessor running a program that measures the time interval between pulses, then calculates and displays the RPM. You can calculate and display the instantaneous RPM, which will often tend to be jumpy. In most cases you want to filter the readings. One way to do it is display the average of the last X number of readings, and discard any that are unreasonably out of whack (indicating a missed pulse or noise). All of this filtering more or less simulates in software the mechanical damping you'd get with an old rotating-magnet mechanical tach.
If there's not a lot of filtering going on, then any electrical noise could cause fluctuating readings. You might check to see if your tach wires are run alongside anythang that could cause excess noise... spark plug wires, power to an electric fuel pump, etc. One telltale sign of that being a factor could be whether the RPM always seems to jump UP by 50 RPM (extra pulses detected) or if it jumps up AND down, or only down... in which case I'd look more closely for a bad ground or some power supply noise on the supply to the EI Commander.
