motor control and encoder theory: http://ocw.mit.edu/courses/mechanical-engineering/2-12-introduction-to-robotics-fall-2005/lecture-notes/chapter2.pdf

Good blog post about encoders: http://www.hessmer.org/blog/2011/01/30/quadrature-encoder-too-fast-for-arduino-with-solution/

Quadrature Encoders in Arduino, done right: http://yameb.blogspot.com/2012/11/quadrature-encoders-in-arduino-done.html

dedicated hardware encoder processor board: http://www.superdroidrobots.com/shop/item.aspx/dual-ls7366r-quadrature-encoder-buffer-breakout-board/1523/