It seems like data visualization experts generally disapprove of gauge charts (see here: What do you call a chart that looks like a half pie chart with a needle indicating a percentage?). The primary reason is that a gauge chart has a low data-to-ink ratio.
Ever since I was exposed to these concepts (a few Tufte books), I generally agreed with them, but today it made me wonder: if gauges are so inefficient at communicating information, then why do cars/boats/planes have lots of gauges on their dashboards? And does the answer to that question have some kind of relevance for creating software dashboards for large enterprises?
Edited to include some additional information I found:
I found a term, "glass cockpit", that refers to an airplance cockpit that has its mechanical gauges replaced with LCD screens. This gives credibility to the "convention" argument put forth by Wayne.
http://en.wikipedia.org/wiki/Glass_cockpit
Here's an iPad app that gives a dashboard-like readout of your car's telemetry, with no gauges to be seen.
http://itunes.apple.com/us/app/dashcommand-obd-ii-gauge-dashboards/id321293183?mt=8
I also found a gross example of digital gauges for cars (viewer discretion is advised).
Best Answer
A (real) dashboard gauge needs to be: 1) physical, and 2) read quickly under circumstances that disturb concentration. In that sense, you want a low data-to-area ratio. Not to mention that when physical gauges were invented, digital (numeric) displays didn't exist so there was no real choice.
A software dashboard is not physical, and is not generally looked at in a pitching, moving vehicle with other vehicles whirring around it. So the effect of imitating a physical device doesn't buy you much.
EDIT: I'd also add that a physical dashboard only has a couple of key attributes to get across to you at (literally) a glance. A corporate dashboard needs to make a lot more detail visible, though of course things should be drawn/coded/organized in a way to also give a quick status.
That's part of the Tufte philosophy of dense detail in presentations that allow a broad view but also allow you to drill down. You car's dashboard doesn't let you drill down, basically because there's no need to.