[Astronouth7303]

None of that is going to work if you're going at any resonable speed. It's going to miss ticks. Use interupts.

Here's some of my code:

//Variables
volatile char State = 0;
volatile long Distance = 0;
volatile signed char Dir = 0;
//...

//Call while initializing
void Initialize_Interrupts(void)
{
	// initialize external interrupt 1 (INT2 on user 18F8520)
	TRISBbits.TRISB2 = 1;		// make sure the RB2/INT2 pin is configured as an input [108]
								//
	INTCON3bits.INT2IP = 0;		// 0: interrupt 1 is low priority (leave at 0 for IFI controllers) [91]
								// 1: interrupt 1 is high priority
								//
	INTCON2bits.INTEDG2 = 0;	// 0: trigger on the falling-edge [90]
								// 1: trigger on the rising-edge
								//
	INTCON3bits.INT2IE = 0;		// 0: disable interrupt	1 [91]
								// 1: enable interrupt 1
	
	// initialize external interrupt 2 (INT3 on user 18F8520)
	TRISBbits.TRISB3 = 1;		// make sure the RB3/CCP2/INT3 pin is configured as an input [108]
								//
	INTCON2bits.INT3IP = 0;		// 0: interrupt 2 is low priority (leave at 0 for IFI controllers) [90]
								// 1: interrupt 2 is high priority
								//
	INTCON2bits.INTEDG3 = 0;	// 0: trigger on the falling-edge [90]
								// 1: trigger on the rising-edge
								//
	INTCON3bits.INT3IE = 0;		// 0: disable interrupt	2 [91]
								// 1: enable interrupt 2

	// initialize external interrupts 3-6 (KBI0 - KBI3 on user 18F8520)
	TRISBbits.TRISB4 = 1;		// make sure the RB4/HBI0 pin is configured as an input [108]
	TRISBbits.TRISB5 = 1;		// make sure the RB5/KBI1/PGM pin is configured as an input [108]
	TRISBbits.TRISB6 = 1;		// make sure the RB6/KBI2/PGC pin is configured as an input [108]
	TRISBbits.TRISB7 = 1;		// make sure the RB7/KBI3/PGD pin is configured as an input	[108]
								//
  	INTCON2bits.RBIP = 0;		// 0: interrupts 3 through 6 are low priority (leave at 0 for IFI controllers) [90]
								// 1: interrupts 3 through 6 are high priority
								//
	Old_Port_B = PORTB;			// initialize the Old_Port_B variable (in user_routines_fast.c)
								//
	INTCONbits.RBIE = 1;		// 0: disable interrupts 3 through 6 [89]
								// 1: enable interrupts 3 through 6
}						  
//...

//The ISR Routine
void Int_3_Handler(unsigned char RB4_State)
{
 // wheel encoder Phase A interrupts.
 if (!ShaftA==ShaftB)
 {
  Dir = 1;
 }
 if (ShaftA==ShaftB)
 {
  Dir = -1;
 }
 Distance+=Dir; // Increment

 switch (State) {
  case 0: // A=0, B=0
   State = 1;
   break;
  case 1: // A=1, B=0
   State = 0;
   break;
  case 2: // A=1, B=1
   State = 3;
   break;
  case 3: // A=0, B=1
  State = 2;
   break;
 } // switch (State)
}

It's based on Kevin's interupts stuff and the Quadrature whitepaper. Hope you can figure it out!