Edited: 12/27/2010 11:56:11 PM by Hotrodhawk

This information it's not to technically deep but you may have to read it once or twice to understand it. The key thing to get out of this is keep your rpm drop,
Minimal after the gear change without running out of engine rpm at the top end.

A close-ratio transmission is a transmission in which there is a relatively little difference between the gear ratios of the gears. For example, a transmission with an engine shaft to drive shaft ratio of 4:1 in first gear and 2:1 in second gear would be considered wide-ratio when compared to another transmission with a ratio of 4:1 in first and 3:1 in second. This is because, for the wide-ratio first gear = 4/1 = 4, second gear = 2/1 = 2, so the transmission gear ratio = 4/2 = 2 (or 200%). For the close-ratio first gear = 4/1 = 4, second gear = 3/1 = 3 so the transmission gear ratio = 4/3 = 1.33 (or 133%), because 133% is less than 200%, the transmission with the 133% ratio between gears is considered close-ratio. However, not all transmissions start out with the same ratio in 1st gear or end with the same ratio in 5th gear, which makes comparing wide vs. close transmission more difficult.
Close-ratio transmissions are generally offered in sports cars, in which the engine is tuned for maximum power in a narrow range of operating speeds and the driver can be expected to enjoy shifting often to keep the engine in its power band.
Factory 4-speed or 5-speed transmission ratios are good compromises for mixed street and moderate performance use, and are "staged" or "progressive", in that the engine speed loss on shifting from 1st to 2nd is higher than the loss on shifting from 2nd to 3rd and so on. The purpose is to keep the engine in its torque range at higher vehicle speed, where wind resistance requires more power for acceleration. Wider gaps between ratios will allow a "stronger" (higher numerically, e.g. 2.90:1 instead of 2.50:1) 1st gear for better manners in traffic, but increase the RPM lost on shifting. Narrowing the gaps will increase acceleration at speed, and potentially improve top speed under certain conditions, but acceleration from stopped and operation in traffic will suffer.
The 1st gear ratio for most 4-speed transmissions is about 2.50:1, and 4th is almost always 1.00:1. The ratios of 2nd and 3rd are placed in between these two, and are discretionary to best serve the weight, intended use, speed, engine tune, and other features of the vehicle.
"Range" is the torque multiplication difference between 1st and 4th gears; wider-ratio gear-sets have more, typically between 2.8 and 3.2. This is the single most important determinant of low-speed acceleration from stopped.
"Progression" is the next factor. This is the reduction or decay in the percentage drop in engine speed in the next gear (e.g. after shifting from 1st to 2nd). Most transmissions have some degree of progression in that the RPM drop on the 1-2 shift is larger than the RPM drop on the 2-3 shift, which is in turn larger than the RPM drop on the 3-4 shift. The progression may not be linear (continuously reduced) or done in proportionate stages for various reasons, including a special need for a gear to reach a specific speed or RPM for passing, racing and so on, or simply economic necessity that the parts were available.
The two factors are not mutually exclusive, but each limits the number of options for the other. A wide range, which gives a strong torque multiplication in 1st gear for excellent manners in low-speed traffic (especially with a smaller motor, heavy chassis or numerically low axle ratio such as 2.50) mean that the progression percentages must all be high. The amount of engine speed (and therefore power) that must be lost on each up-shift is higher than would be the case in a transmission with less range (but less power in 1st gear). A numerically low 1st gear (2.00, &c.) reduces available torque in 1st gear, but allows more choices of progression.
There is no choice of ratios that gives the "best" performance at all speeds, nor is there a choice of final drive (axle) ratio that gives the "best" performance at all speeds. It simply does not exist, all ratios are compromises, and not necessarily better than the original ratios for most use.
The advantage of a close ratio gear-set lies in the fact that the RPM loss at very high speed is reduced, allowing extra power to accelerate above 100 mph. However, of necessity, the torque multiplier in the lower gears is reduced by the same proportion, and performance at low speeds is much worse. Even for road racing, the closest possible ratio is not always the best choice since many races begin with a grid start (favoring slightly wider ratios with high progression, where 1st gear acceleration is very important) and some with a flying start (favoring close ratios, where 1st gear acceleration is less important).
In general, engines with smaller displacement, very long duration cams, ported heads, large carburetors and so on don’t pull well from low rpm, and when the 3-4 shift will benefit more from close ratios in the upper gears, and even more so as the maximum speed at a specific course increases. If the shift takes place at a speed where air resistance is high (70+ mph), closer ratios are better. If your engine has been specifically designed for a tuned RPM torque peak (or if that is how the engine behaves), the transmission ratios must be chosen to ensure that after each shift during a lap the engine speed recovers to a point above this peak at that specific track. From the negative viewpoint, the ratios must be arranged to avoid dropping the engine into a "hole" on an up shift, where power falls off disproportionately.
If the widest ratio change gives a 25% loss, the shift RPM is 7,000 RPM, and there is a torque increase at 5,000 RPM you’re safe: 7,000 - 25% = 5,250, the engine will be in this desirable range on acceleration.
If the widest ratio change is 30%, shift at 7,000, and torque at 5,500: 7,000 - 30% = 4,900, far below the power range and the acceleration (and perhaps the jetting) will be weak until you reach 5,500. You will definitely benefit from a closer gear set, or at least re-arranging the progression to reduce the 30% drop to a better number. Depending on the bike and the track, adding to the drop in the previous gear pair (i.e., problem with the 2-3 shift: add some drop to the 1-2 not the 3-4) is the 1st choice but results will vary.
Individual race tracks with combination of maximum speed and corner speed will require different intermediate (2nd & 3rd) gears to allow downshifting for a specific gear to enter a turn, or to use only one gear during a turn to avoid traction loss. The key to analysis here is whether your favorite track has a spot where the engine is "flat" after shifting at an awkward moment in a turn, but better as it speeds up.

http://en.wikipedia.org/wiki/Gear_ratio