If your interested in hobbing gears rather than milling them... you might want to look at this gem. He started out planning to make a mechanical linkage but instead used an encoder on his spindle with a pulse divider circuit to drive a stepper. It fits on his manual knee mill. The details on photobucket should be enough to duplicate.
https://www.youtube.com/watch?v=pzC8eafs2fI
https://www.youtube.com/watch?v=60GGPEZ-xLY
http://s1308.photobucket.com/user/i_...ronic%20Hobber
Along the same lines Andy Pugh over at Linuxcnc has written a custom hal to pulse divide in a similar fashion. I preferred the divider circuit because it can be fitted to nearly any machine... mill or lathe.
https://www.youtube.com/watch?v=ZhICrb0Tbn4