LOL at that fan!
Well, once you get a good fan, hook the yellow wire up to 5v via a resistor (say, 4K7). Most fans have open-collector speed sensing. However, to make sure you don't fry your arduino, double check it once you have the resistor hooked up. If it switches back and fourth from GND to 5V, then hook your arduino up to the sense wire and start programmin'! If it goes from 5V to 12V (or whatever voltage you are feeding the fan), the fan likely has an open-emitter output. You will need to setup a voltage divider via two resistors in order to not possibly fry your arduino.
Fans will have more than one pulse per rev, so beware of that!
So, say, if the fan has 4 pulses per rev, then measure the time it takes it to do 4 pulses. Then using some simple math, you can convert it to revs per second, minute, hour, etc...
Another thing to be aware of is if you are PWMing the fan's power leads. This will cause false readings from your sense wire! You will have to use an adjustable power supply controlled by the arduino, or use a 4 wire fan, which has an extra wire for (usually PWM) speed control.