[Sam N.]

We used rotary encoders (non-absolute) to close a position loop around our steering motors. Our modules can twist in any one direction indefinitely.

To align our wheels upon robot enable (to tell software where "forward" is so we can measure displacement from zero) we use a pair of IR emitters/optical sensors. The wheels automatically snap forward (it takes .5 seconds) and then normal operation begins.

It's not the best solution... two separate sensors + wiring and a pre-operation software routine, but it works.