I actually made a robot for my computer science project in my last year of high school using exactly the setup you described, except with the higher-speed (lower power) early-version 9V motors. I had no problems with efficiency (as long as the shaft lines up well; it's often a good idea not to attach the sensor too rigidly, so that it doesn't jam on the shaft). I also found it be extremely accurate, and I read somewhere that the RCX monitors the sensor more than fast enough to keep up with even ungeared, unloaded motors.
-Ian Mackenzie
Woburn Robotics
Team 188
www.team188.com