Aye, gears in a blocky square world :-S .
I like the idea of containing them in blocks - maybe something like the redstone circuit shrinker mentioned a couple of posts back - you get your gears worked out in a configuration, stick/map the whole assembly in a storage box which outputs it into a single block.
Stick an axle through it and have a motorised unicycle.
Better than travelling on a pig. :-Y
Seriously though, it could have an output side or axle that turns or oscillates side to side. But maybe that's too far from the Minecraft idiom.