Andy,

To avoid too much lag I wonder if this would work.

How about just skipping the firing of a plug... like an interupt.  You
could detect rotation ratio front to back and if it is way out of sink
you could interrupt the firing of the next plug?  Dont know if this
mechanicaly would be detrimental.

<SNIP>
>I'm just thinking out loud here. Since you have maximum traction when
>there's no wheelspin, maybe you could devise a system that compared the
>rotation of the front and rear wheels and slightly backed off the
>throttle if it detected any slipping, checked again and backed off if...
>etc.