Bojan,
No worries mate, I got that important parts you mentioned from FarCircuit and the rest from Jaycar, board and chip from Simon. EK box is already finished. Shopping for encoders now

BTW, What do you think about this encoders from Ebay that Martin posted:
http://cgi.ebay.com.au/Oak-Grigsby-R...item5acfd0836c
Brand new rotary encoder
Manufacturer: Oak / Grigsby
Model: 91Q128-43-00110
128 pulses per revolution
2 channel full quadrature encoding
1" square body with a sealed enclosure
1/4" diameter shaft, .4" long
4" cable terminated with a 4 pin female plug
Martin,
I know about those ones on Ebay, although the first link you posted is very tempting. It would be very cheap and a lot of gear ratio to gain at least 4-5 000 ticks per rev.
Malcolm,
Thats very interesting design mate. Keep us posted.
cheers all