[intellec7]

Haha. Three seconds after posting I realized that I'm "overwriting" the Left encoder device reference with the wrong pins (the ones of the left encoder) as is clear from the first picture. Now it works!

If anyone could clear up the shift register question, I'd appreciate it.
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EDIT
It looks like I'm not reading the proper encoder velocity -- not even in the example. No matter how many samples I average or what I set the minimum rate to, at slower speeds, I read +/- 83333.3 (depending on the direction) If I speet it up, the numbers change. I can't tell whether they are accurate or not, though.

If it is relevant, I'm doing quadrature decoding and am using an NXT motor, which produces 720 quadrature transitions per rotation (180 rising pulses on a single channel per rotation).

I am using the latest cRIO image and LabVIEW edition.
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EDIT 2
This symptom only occurs when doing 4x decoding, and not 2x or 1x. I did read about something similar before, but I can't recall where.