[bojan]

Bob, this looks OK to me.
How many ticks you have on that wheel? And, more importantly, do you have two of them?

I took different approach to encoders, I dismatled couple of serial mice for parts. Basically, my solution is similar to some described on links you can find on Mel's webpage.
Regardless of friction coupling, I do not have much problems with slipping.
I made them like this because I wanted the tube to be easily mounted or removed from frame (now I am thinking of placing the timing belts from old printer around the drive wheels, this will not slip).
My optical wheels have 48 ticks, and taking into account the coupling ratio, I have around 7000 ticks per 360°, this is enough for what I am doing.
You will need better resolution, as you want to find objects with encoders.. whilst I am finding them by means of slewing from nearby objects I can find visually. Encoders are here only for my convenience when I have people around, so I do not have to reset the position too often when jumping to various objects from one side of the sky to another, and I still have good enough tracking for visual observing.