If gauge charts are bad, why do cars have gauges? 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).
http://www.chetcodigital.com/index-Automotive.htm
 A: There are great answers here.  I also like @whuber's comment, especially "[o]ne big problem with angles is that the comparison may depend on how the angles are oriented".  Let me throw out one quick note here: it's worth remembering that all car speedometers are oriented in the same way.  (What I mean is they all run clockwise, and the physical location of the endpoints are in approximately the same position at the bottom.) In line with @Wayne's point about having to quickly glance at the gauges and then back to the busy road and still  have extracted the relevant information, note that to encode magnitude via relative distance (a la Cleveland's dotplots, which I do like a lot), you have to encode the position of the dot and also the positions of both endpoints.  With a gauge, you need only notice the angle of the needle, which you can still 'see' in your mind even a few seconds later while looking at the road again.  Realize that you get very used to looking at your car's speedometer.  Thus, interpreting this angle can become effortless.  Moreover, because all car gauges are oriented the same way, it is easy to adapt to an otherwise unfamiliar car, although because the top speed listed can vary (as @cardinal notes) some period of adaptation can be required.  On the other hand, although the endpoints would always be in the same place, it would be more difficult to become automatic at reading a horizontal position because your head will always be in a different position and thus the endpoints will be in a different position relative to your head.  It is possible to overcome this by making the gauge larger so that the relative position of your head has less influence.  In fact, 'linear' gauges were somewhat common in the 70's & early 80's (they were actually horizontal windows over a round gauge), and they generally took up half the dashboard.  This will not be a problem for a gauge, though, unless you tilt your head to the side and try to read the speedometer, in which case, it would be harder to read!  
A: 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.
A: In supplement to Wayne's fine answer, Robert Kosara has a recent post on his Eager Eye's blog about the very topic, Data Display vs. Data Visualization. In addition to as Wayne mentioned the goals of real-time visualization vs. more static displays might call for differences, he also mentions that gauges aren't very good for displaying multiple values. This is summed up nicely in his comment, 

What you want to know is, how fast am I going right now? How much gas do I have left? What your speed was five minutes ago, or how much gas you had in your tank three hours ago, matters little.

So here is any obvious contrast between the goals of data visualization versus car-gauges, we pretty much always want to see multiple data values! And circular car-gauges are certainly a poor tool to do that. Sometimes we don't want to see multiple values though (a few circumstances are given in this question on the GIS site, What is the point of standard symbology?). And so we might expect other rules to which we apply the data visualization techniques in such circumstances. The GIS post I mention uses very flashy symbols/icons for point patterns that attempt to incapsulate the nature of the event (and sometimes visualization techniques like blinking dots to focus attention). 
What I find interesting is that the work of Cleveland on comparing angles is still pertinent to car gauges though, and hence we still might expect a linear scale for a car gauge to work better than the circular display. So I suspect there might be more historical context as to why circular gauges were chosen (they are compact?), and it certainly may be this historical inertia as to why they are popular.

This much be a popular topic in the thralls lately, as the Visual.ly blog just came out with a post on the topic as well, Speedometer Design: Why It Works. In there they give credence to some of the things gung mentions in his post that I am somewhat critical about in the comments, in particular how we develop a gestalt for identifying locations around the circular display.

I think I'm partially coming around to this notion. A circular display provides more visual distinction between general areas than does a linear one. For a general example, it is easier to quickly tell the difference between a needle pointing to 3 o'clock and a needle pointing to 12 o'oclock than it is to tell the difference between 15 and 12 on a linear scale.
I'm still not totally convinced though, and I say rubbish to the notion that acceleration is easier to distinguish on a circular scale (or even if it is information we need the dashboard to inform us about anyway) that the visual.ly blog post mentions. Just my opinion though, I'm not sure any of us have been citing directly pertinent experimental results on human perception. Cleveland's is a start, but not likely to give an entirely satisfactory answer to these particular circumstances.
That being said the multiple data values are still the main crux of the argument, circular displays aren't good for multiple data values.
A: Gauges are good if you need low-resolution at a glance.  Speedo, tach', oil temperature/pressure don't need single digit resolution, and in a vehicle, you want to know if the are approximately right.  An analog watch, can be glanced at, and you know that it is about 10 minutes to 9.  You don't (usually) need to know that it is 10 minutes 16 seconds to 9 !
Virtual dashboards can very effectively indicate approximates, and add the option of switching modes to give higher resolution indicators in numeric form.  This is particularly useful for pre-empting faults, such as logging trends in oil pressure in (light) aircraft.
