The loop is wired in series with the ignition primary circuit so Planky is correct. You will not want to make your car an illegal source of radio and TV interference, which is liable to end in prosecution, so the way of doing it needs to be considered carefully. In that regard it is best to take the feed direct from the ignition switch to the tacho loop, and from the other end of the loop to the coil positive. The other way, putting it between coil and distributor, means that the added wires are carrying quite significant voltage pulses and will radiate more interference, although the tacho would still work. Keeping the wires short is a good idea, and if you have an interference suppression capacitor on the coil positive terminal, try keeping it there. Only if the tacho does not work reliably should it be moved to the live feed side of the tacho loop, where unfortunately it will be less effective than it was.
If the tacho does not work well, or at all, reverse the loop.
If you have a ballasted system, the tacho loop goes at the ignition switch end of the resistive ballast wire, and the starting bypass stays on the coil positive. The tacho will not work during engine start, but I would not think that it matters.
I prefer those current sensing tachos to the voltage sensing type, however you would need some electronic wizardry to make them work reliably with most types of electronic ignition. It would not be a huge job to design something, but I expect that someone has already done just that.
