You will definitely need to get that fixed. The gear position sensor is not just to feed that little display, it also tells the ECU what gear you are in, and that has an effect on the opening of the secondary butterflies. If it reads 1 or 3 when you are in 6th gear, you could lose some of the low-end grunt you should have.
Mine always reads OD (really 6th, since it's not really overdrive), but that's because I have a GIPro ATRE installed. The GIPro shows me the correct gear though, every time.