You unlock Gold Sparkster mode after you finish Arcade mode on Hard (see the Devotindos Defiler achievement guide). It's just like Hard, except that you have half life, gems are worth more points, and you don't need to do the "special techniques" on the world bosses. (Which is a relief, since doing Axel Gear with only 4 hearts is quite a challenge by itself. :)
I recommend taking it slow, conserving your life and killing enemies carefully, and restarting if you lose too many lives on a level. Try to get all the gems on a level, as it will give you 2 extra lives at the end. (It's easy to do this on the flying levels, in particular!)