Wow, a flurry of activity after a period of hibernation....
I'd thought about using the mouse encoders as well, but have since purchased a used Microscribe off ebay. Its really quite nice, a bit small, but quite nice. Now its just a matter of figuring out how to 'leapfrog' the unit from place to place to capture larger objects.
My biggest concern with any arm was the resolution. Each step needs to be quite precise for the length of the arc covered by an arm. How Faro and Romer pull off .003" resolution on a 12ft arm is beyond me, that's like a super-encoder of 160,000 cpr and with zero backlash!
The Microscribe works for me, but if someone can work out the resolution with maybe a large encoding disk and a regular mouse encoding sensor I'd be open to trying to build my own especially if it could cover a larger working area. Someone with a lathe that could make a 6" or 8" disk with 10,000 slots cut in its perimeter would be a nice start, now you'd be looking at .003" resolution for a 4ft arm. Some ABEC7 bearings and aluminum extrusion and the mechanicals would be done. Now, about that pesky software to translate the rotations of the joints into cartesian co-ordinates...
It seems like its so close to a DIY solution that I can see it already. I fear the reality is I'm missing some of the difficulties in assembling the HW & SW into a usable system.
Cliff