Low Res Optical Encoders for Speed Control

[Ether]

we had 2 wheels and hence 2 encoders. Would that cause any problems?

No. (But see the following note about wiring).

also, I am not sure how much to be worried about the singal integrity over the 7 feet of wire that the students had wired next to all other wires.

You should be worried enough to test the sensor signals thoroughly before trying to tune the control algorithm. But then again, it's proper practice to do that anyway.

including the 20kHz jaguar output wires going to the motors

For the record, Jag PWM frequency is 15KHz.