My '98 323 has a small problem with the odometer. The readout almost totally disappears at times, then reappears on its own. It doesn't lose any information, just becomes unreadable. Loose connection?
The light bulb for the odometer is probably coming loose. Mine went out on me completely and I would get the same symptoms except it would always be off. You can try taking out the whole gauge cluster and checking out whats going on with the light bulb. Its the same one as the OBC light bulbs so you might want to swap it with one from the OBC so that if it is the light bulb itself, you will not have to pull the gauge cluster out again (it is sort of a pain). Can't really reccomend anything else. Good luck.
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