Looks like I'm a little late to the party for the VSS discussion, but I'll post what I know for future reference.
4l80e/60e transmissions require a shaft mounted 40 pulse sensor with no exceptions.
If you are using a manual trans or an older t400 700r4 style trans then you can use a speedo cable mounted 2 wire 4 pulse sensor (I don't think three wire sensors are compatible, though I haven't tried either) but it will require changes to the software for the computer to register accurately.
Advance adapters makes an adapter that bolts to the back of a 4l60e that mounts a speed sensor that reads a tone wheel that attaches to the output shaft. The easiest thing to do is swap the output housing on a 241 with the correct speed sensor tone wheel set up. Just make sure you wire a low range switch to keep the computer happy with this option.
Speaking of 241s; it is possible to swap left hand and right hand drop output housings with some careful grinding of the ridge that locates the oil pump. This is what I did since I'm running a left hand drop t-case and I wanted to keep my mechanical speedo.
My setup is a 6.0l/4l80e/241, I machined a 241 style tone ring to fit over the input shaft of the t-case then drilled and tapped the adapter for the sensor. If I would have been smart I would have followed my own advice and used the factory 241 speed sensor parts and bought an electronic speedometer.