[bborb]

Picture a dragstrip where cars drag race. Now build a picket fence the length of the dragstrip, right in the middle between the two lanes of the dragstrip. The slats of the picket fence are 6inches wide and placed 6inches apart. Now you and a buddy are racing, at night, and your cars are equally fast so you are neck and neck the whole way. Here's where your question comes into play. During the race, you shine a flashlight at the picket fence and on the other side your buddy observes what appears to be a light that is flashing very fast. Now your buddy is Superman and he can count very fast, and he can count the flashes of light and compute at any moment how far he's travelled since you turned on the flashlight.
The encoder strip is the picket fence, and you and your buddy are "Team Reader Head"...... you being an LED and Superman is an opto-sensor which turns on and off 5volts, ON when light hits it and OFF when light is blocked.