[Kevin Karan]

The reason it has 2, is because it has 2 sensors on it. they are set half a notch apart from one another. The theary behind it is that you get directional ability by seeing the order the things hit. If you dont need direction you could just use one of the signal wires. If you want high res and all the features of the encoder (do you want to know if its going forword or backword) you could just put the second signal wire on its own interupt (excluding the power/ground).