Re: Magnet needed?
Not so sure about the image.
Anyway, about using an oscillator, you could probably use a 555 timer, just set the 555 up in astable oscillator mode, and connect the output pin to the pin formerly used as the hall sensor's input. You may need to play with the 555 a bit to get the high time as short as you can for reliable detection, while not leaving it too long that you get false readings.
You'll need to adjust the 555's oscillation frequency to go along with the speed you want to travel. Assuming 24" diameter tires, 40 mph comes out to about 9rpm
As for where to mount it, you'll probably be best off making the 555 circuit on a separate board, and then gluing it to the backside of the spokepov board.
This is all assuming the SpokePOV is structurally strong enough to withstand travel at 40 mph. It was designed for a bicycle after all, so 40mph might involve the thing flying to peices on the road (and a few angry drivers as a result, those chip legs are sharp, wouldn't want one of them in my tire)