PIDController - control speed vs distance - SetSetpoint

[bmfrc]

Hi,

I need help in understanding how to measure distance vs measuring speed.

We are using the following encoder:
http://www.andymark.com/E4T-OEM-Mini...-p/am-3132.htm

The encoder can give information on speed (rate) and distance.

I looked into FIRST example on this page:
http://wpilib.screenstepslive.com/s/...rs-pid-control

Please help me understand what value should we set in the SetSetpoint() method and how the controller knows to measure the distance or the rate?

Thanks!