Is that last question asking for an explanation of Quadrature Output? OK if it is, Wikipedia has a pretty basic one and there are a lot others but look at
http://en.wikipedia.org/wiki/Rotary_encoder And scroll down to the section headed "Incremental rotary encoder". They also explain that backward count problem so kudos to them for being through.
This same theory applies to rotary and strip encoding schemes so the entire article is a good read.
Hope that's what you were asking.
Steve