I can also recommend the CTRE magnetic encoder:
http://www.ctr-electronics.com/senso...c-encoder.html
As well as the CUI AMP 10 series of encoders:
http://www.cui.com/catalog/component...mental/modular
We have successfully speed-controlled high speed wheels with both of these encoders directly connected to a Talon SRX.
Both encoders are available from AndyMark.