I don't think this is just a VDIG issue. (I know that my both my '97 and '01 boats needed new sending units about every 5 years to stop the flutter.) Last spring my '01 got real bad and would flit from empty to full and no where in between, even though I had replaced the fuel pump the previous summer and my guage worked well all summer. In this case, I found a corroded ground wire that was creating the problem to an analog fuel guage.
Just last week I was researching a similar fuel guage problem on my '07 escalade and came across a Popular Mechanics article in April 2011 issue, page 109.
The article basically says that the float in the gas tank moves up and down over a wirewound sensor so the changing resistance sends data to the guage/sensor. The electrical contacts are being corroded by the alcohol now found in almost all pump gas. This alcohol is corrosive, especially if it separates from the fuel which is a big problem in boats since water tends to separate the alcohol from the fuel more quickly.
The Indmar engines are based off the GM block and run a similar in-tank fuel pump with the fuel guage sending unit internal to the pump, so this may make sense for the boats also. A GM technical service bulletin calls for using a product called FUEL SYSTEM TREATMENT PLUS (PN88861011) to prevent the problem and may reverse the corrosion if it is minor.
I have always used Stabil treatment periodically, especially spring and fall months, to prevent separation/corrosion. It seems to me that Sta-Bil may act the same as the GM Fuel Treatment. Last year, I switched to the marine version of STA-BIL Marine Performance Treatment for my boats and snowblowers which also eliminates water and helps prevent corrosion and fuel separation. Here is a link http://www.goldeagle.com/products/product01A7.aspx
The old school technique of using water trap filters don't help much with these modern pressurized fuel systems since these traps are installed in the fuel line after the fuel tank. The fuel filters on the new fuel injected boats are sealed inside the fuel tank. They are basically a screen covering a metal dish that sits over the bottom of the fuel pump intake. the small basin for collecting water on the filter doesn't trap water for very long in bouncing ski boat
and it doesn't filter or collect separated alcohol.
Your local boat mechanic can help you test and the measure the resistance being sent to your guage using a multi-meter. Taking measurements every 5 gals or so when you fill any empty fuel tank will let you know if the sending unit is working properly before you spend any money replacing parts.
I hate being embarrased running out of gas.... so I use a "backup" fuel guage. I started it a long time ago in a boat that had a flaky guage. I pull the back seat cushion when I am fueling and visually watch the fuel level fill. I have marked the tank with magic marker showing how many gallons are left at that level, and what the fuel tank guage reading shows at this level. This way I can estimate fuel amount without having to click the key and charge all of the vdig and engine computers just to get a fuel reading before I head out for a session or when I am filling the tank. Plus I have never had a fuel guage where half a tank is half the fuel capacity.
(No, I am not totally anal, but just too antsy to sit in the beach chair; I made these marks one sunday afternoon when I was filling an empty tank and the water was too rough to go out and play. Since my boat sits at a different angle on the trailer than it floats in the water, I later found it helpful to add a few additional readings for when the boat was on the trailer and I was filling at a gas station. Seems I now have an antsy afternoon and mark the tank every time I get a new boat, and have been know to mark the tanks of some of my friends' boats. )