As Steve pointed out, everything you need to know is on Mel's website (have a look at links as well).
As far as mice are concerned, of course you need quadrature input (otherwise there is no way computer can tell in which direction the mouse is moved.
So, at the sensor level, you have quadrature signals (two channels, one LED + two photo sensors.. or sometimes two LED and two photo-sensors, this depends on encoder design) for each axis.
At mouse interface level, you have the conversion of those quad inputs into serial data stream RS232 or PS2.
However, as I pointed out several times in my posts, I think there is a software bug somewhere (mouse driver or scope executable), sometimes resulting in overshots if telescope is unintentionally moved while scope.exe was in tracking mode. I had this problem with mouse driver in 30% of cases.. and even once per night I would consider one too many. The problem never occurred if I stopped the tracking, manually moved the telescope to a new position, and then turn on the tracking.
And, after switching to Ek's box, I never observed that problem again.
That is why I recommend using EK's box as an interface between quadrature signals generated by encoders and computer running Mel's software.
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