Went home and tested some more yesterday with no sucess. It seems like al the information about location of speed signals doesn't apply to my 318is.
Going from this wesbite
http://www.unofficialbmw.com/speedo/speedo_d.html I soldered a test wire to my speedo just like in the picture, and nothing. No signal at all.
Since we couldn't get that to work we tried looking under the glovebox for this connector. The black wire should contain the rpm signal.

Unfortunately I couldn't see that connector anywhere in my car. I took off the plastic ECU cover and still couldn't find it. So I'm not sure if its buried somewhere else back there or if my car doesn't have it at all.
We also looked at the yellow OBC connector on the back of the cluster for the road speed signal. Supposedly theres a wire that sends that signal from the cluster to the OBC. I just am unsure if my car would even have it considering I only have a 6 button OBC. I was also not able to locate a pinout chart for that yellow OBC connector.
Also, how would I go about testing the pins on that connector? Doesn't the connector have to be plugged into the cluster to get the signal? Would I have to cut and splice every wire running to that connector?
So far this has been frustrating. I've done a huge amount of research but there are no definitive answers. I was hoping these two signals would be fairly easy to get without having to tear into the car, but its looking less and less promising.
Any tips or help would be extremely appreciated!