Depends on the year of your car. Early ones have a mechanical speedo drive into the clocks, later ones use an electrical speedo drive which I believe also goes into the clocks.
Not really needed, just compare the readings with satnav to stop urself from speeding. When i was on 13" with 185/70 tyres the speedo was 3-4mph higher than gps. Now i'm on 15" with 195/50 the readings are spot on
Yeah the speedo is a couple of mph out on mine compared to the OBD2 reading, mainly over 60 really. Smaller to bigger tyres should in theory bring it in line as pollyp says.