You don't have to alternate ground pins, you use a technique known as charlie-plexing which will led you run 2 LED from one pair of pins because you can alternate which one is HIGH and which one is LOW. When you have HIGH/LOW it runs one of the LED, and when you switch from LOW/HIGH then it runs the reverse-LED. The LOW pin is treated as a ground.
Heres some basic info:
http://www.instructables.com/id/Charlieplexing-with-the-Raspberry-Pi/You just hook up a resistor and the 2 LED in different directions. Now as far as the pulse-ox goes, there are 2 LED in there it is just that one is visible and the other infrared, but the idea should still work because the schematics say it is coming from pin 2 and 3 of the cable, so you would hook those up to 2 GPIO pins on the Raspberry PI, or to 2 digital pins on your Arduino.
By the way, I found this interesting article:
http://www.ni.com/white-paper/14248/enNow the other problem is what kind of "PHOTO" sensing element is in the sensor? Do all sensors use phototransistors, or do some use PHOTODIODE, PHOTOTRANSISTOR or PHOTORESISTOR. I found an interesting thread here:
http://www.societyofrobots.com/robotforum/index.php?topic=7331.0Looks like the pinouts show it is a photoTRANSISTOR which should then change the amount of current going through, very different from measuring resistance or even voltage which would be the most ideal for using Arduino Analog INPUT (which measure voltage based on 0-5V range or AREF).
This problem is not new... I see a million posts on how to read phototransistors using Arduino and it seems it is not as easy as it looks. We may need additional electronics to amplify and filter the signal from the phototransistor as it may be very low and noisy. Here are some solutions I found which seem to work with not much but resistor parts, but I have a feeling we will need more to get something useful for the oxygen sat reading:
http://arduino.cc/forum/index.php?topic=50243.0The schematic which seemed to work in the above thread was this:

Looking at some DATASHEETS for phototransistors (like this one here... Figure 6):
http://www.everlight.com/datasheets/PT334-6Cnew_datasheet.pdfTo in Figure 6 (on page 5) there are some curves showing collector current versus collector-emitter voltage, and there are several lines showing "Ee = 1.50mW/cm2" and so on. I assume that is the light intensity falling on the device, so you are seeing different curves characterizing what happens with the current/voltage at different light intensities.
My understanding from this datasheet is that you POWER the phototransistor with different voltages (like 1, 2, 3, 4 volts....) and you will get the Current flowing through depending on the light falling on the sensor (the different Ee curves). Notice that in the schematic above the test point is between the +5V and GND so it is acting like a voltage-divider, maybe so that instead of putting the full 5V through the device, the resistor helps reduce the voltage.
The phototransistor varies the current and the Arduino measures voltage. Therefore we need to convert current to voltage. Therefore, we need an Op-Amp as illustrated in many of the pulse oximeter schematics I've seen, as follows:
http://en.wikipedia.org/wiki/Current-to-voltage_converterHmmm.... the plot thickens.... But it's nice to learn all this stuff in the process!!!