SF340 Captain experiences Np gauge malfunction then failure with torque fluctuations and high ITT. Crew elects to divert to nearest suitable airport.

Narrative

We were in cruise at 14;000 FT when we noticed that the right engine Np gauge was moving +/-50 RPM. As the actual propeller was stable and 'in sync' with the left propeller; I assumed that either the sensor or the gauge was failing. I read through the emergency non normal checklists that are associated with propeller overspeed/underspeed conditions to be as ready as possible should either condition occur. Additionally; I checked our position relative to ZZZ using the FMS. We continued enroute for approximately 5-10 minutes. I wrote up a discrepancy in the maintenance log and was making an effort to contact dispatch on the radio. The excursions on the Np gauge continued to increase. First to about +/-500 RPM and then larger increases. This was not unexpected with a sensor or gauge failure. However; then the gauge fell to zero and jumped back to 1;230. at the same time there were several very large excursions in the Np gauge (+/-1;000 RPM); the torque and Ng gauges indicated small changes and the First Officer pointed out that the ITT had increased to 878. With this; both myself and the First Officer noticed 2 subtle yawing motions to the right. This is when we decided to make a precautionary landing in ZZZ. We ran the proper checklists; notified the Flight Attendant; dispatch and the ZZZ Station. Center handed us off to ZZZ and we landed without incident. Failure of Np sensor. Followed by yawing motion that indicated a larger problem may be looming in the shadows.