I have had good success using a magnet and a reed switch at speeds up to 320 rpm for periods of several hours.
Here is a temporary setup that I used to count the turns on a sensor coil that I made for my Aurora Borealis Monitor:http://www.flickr.com/photos/54986139@N04/5098434130/
However, despite good success with reed switches for these kinds of temporary setups . . . I would be inclined to go with a Hall Effect Sensor for higher speed or longer term installations.
My local electronics supplier sells both reed switches and Hall Effect Transistors in the $1-3 range so there really isn't a difference in price.