Yes, you should pitch up and down. You probably don't want to pitch up and down as much as the velocity varies, though, because while more physically accurate, the formant shifts will sound really weird. In GS 3.1, we get XACT 3, which has some filtering built-in, which may allow you to affect the formants a bit as you shift, which would help.
Also, it's a good idea to fade between at least two sounds (slow and fast), because slow sounds are dominated by the grit of the sand/surface that the wheel is rolling over, whereas fast sounds are more dominated by the rumble and noise of traction. You can combine pitch shifting and fading in XACT if you want, and you can pitch different sub-sounds differently based on the velocity.
In general, good sound effects for vehicles is fairly intricate, and something that sound designers spend a lot of time on, using many different component sound parts that get blended together at runtime to get the in-game sound.
Jon Watte, Direct3D MVP
Tweets, occasionallykW X-port 3ds Max .X exporter
kW Animation source code