[Al Skierkiewicz]

Issues,
Building on what has already been presented, a quadrature encoder is one in which the outputs ( in this case two) are electrically 90 degrees apart. It is common to divide a circle into four parts and these are normally called quadrants. Quadrature is a term to show that signals are in adjacent quadrants but not opposite.
A simple encoder can be built using a wheel with half the rotation colored black and half white. By using two light sensors placed such that one is 90 degrees of rotation behind the other one you can determine not only how fast the shaft is turning but what direction. For this simple encoder, it will require at least 180 degrees (one half the wheel) of rotation to get one tach pulse and 270 degrees (more than one half the wheel) of rotation to get two tach pulses and determine the direction the shaft is moving. (See Dave's table above.) This type of encoding is simple to use and decode with software or a few logic gates. If you add more light and dark spaces one the wheel you increase the accuracy.
For instance if you are sensing a wheel that has a circumference of 10 inches and you use a disk that is half white and half black, the minimum distance you can measure is 5 inches (10"/2 sections). If you divide the disk into 10 sections, alternating white and black, you can measure 1 inch (10"/10 sections), etc.