You know, the roll your own detector was really my first choice, and kind of what initiated this request, but I could not find dual channel detectors anywhere.
You're right that there are so many ways to so this. I really don't know what the bet choice is either. Maybe you might have a better idea.
The final product of this will hopefully be a consumer-ish product. Not expecting to sell tons, but trying to make it low cost. What I'm trying I do with this portion of it is basically this. I have a tiny geared motor (for the prototype I'm using the pololu motor with extended shaft
http://www.pololu.com/product/2204) and the encoder module that they sell. The encoder is a reflective one that sits on the back of the motor. My goal for this portion is to basically turn the motor into a servo, where you would say I want to turn it X degrees one way or another. The shaft should also be able to be turned by hand and the device needs to know how many degrees it turned. If you know the gear ratio and you know how much the little
motor has turned using the extended saft you can figure out how many degrees you have turned. It doesn't have to be perfect, so I think this should work well enough.
The whole thing had to be less than an inch wide and can be a little long, but as compact as possible. So to do this in a production environment, I figured it would be a lot more expensive and complicated to have one board on the back of the motor and and a longer one perpendicular to it. I thought I could use this kind of encoder disc and be able to have all my chips and stuff on one board. I thought about Hall effect sensors too, which I might also be trying.
I hope this makes sense. I tend to ramble and I'm typing this on my phone