I have the same issue, even with a new pump. I was told that it might be a short in the wire that runs from the gauge to the pump, or the gauge itself.
Next time you replace the fuel pump unit, make sure you disconnect the battery. That might cause the spazzing out and incorrect fuel level readings.
I got a new fuel pump for about $105 at O'Reilly's, which inclueds float, pump, sending unit, strainer, and tank o-rings. I also replaced the cheap tin locking ring with a more durable steel one for about $10. Had to bend the prongs on the tank out a bit to make it work, but it sits in place tighter and won't bend when being pounded back into place.