I use 16 slide potentiometers. I haven't done any serious stress testing to see how fast you can change the potentiometers and still get reliable readings. My project is only in the initial phase. The multiplexer is the first submodule i build. I made a small PCB for it. I will post a complete step by step "how to" as soon as i get some time. But it is basically just two CD4051 IC's, and some kode based on the 4051 example in the Playground.
I have written a small program on my PC and i have setup Arduino to read the 16 potentiometers send their values to the PC program. I read the potentiometers and send the values every 10 ms and it doesen't seem to be a problem.
If the sensors you were thinking about using are the kind that send out a voltage (like my potentiometers do) i can't see why you shouldn't be able to read them just as fast.
One thing to note is that right now i don't do anything with the values on the Arduino, i just send them. In a real life situaton some processing would probably take place in the Arduino program, using a little more time.
MikMo
EDIT: I tried at serial speeds of both 9600, 19200 and 38400. The PC program seemd to be a little less responsive at 9600. 19200 and 38400 worked fine.