Your speed converter is the most likely cause. The sparking you saw suggests something was shorting out, but that could have been almost anything. It's most likely to be part of the loom that's been fiddled with, e.g. the speed converter.
As for the £30 converters: I wouldn't want to fit one to my car unless I heard from reliable members on here that the specific model I was about to buy worked well, and didn't muck up the ancilliaries. There's more to speed conversion than just making the speedo show a different number. The ECU uses the speed to work out how much power steering assistance to use, how to control the overdrive AFAIK, etc.
If you like having over-assisted power steering even at high speed so that you get no feeback through the wheel, then crack on and buy a cheap converter.