I am currently retrofitting my mill. My z axis lead screw pitch and diameter is different than my x and y. Will this be a problem? How does software determine how many rotations are equivalent to a distance?

Jhwatts,
This will NOT be a problem because each of the programs that I am aware of have in their setup screens steps/in (mm) for each axis. Threfore, it doesn't matter.

The steps/in is determined by the number of steps your stepper has (or encoders on a servo installation), any gear reduction you have and the pitch of your lead screw.

For example (and I hope my math is correct)
Stepper = 200 steps / Rev
Gear reduction = 2:1 (ignore this if direct driven)
Lead Screw = .2 " pitch

Steps/in= (steps per rev * gear ratio)/pitch
In this example,
Steps/in= (200*2)/.2= 2000 Steps/in or conversly, 0.0005"/step

I know if your using TurboCNC at least, it has a calculator to determine it all for you. Each axis is individually calculated, you just enter any gear ratios you may have (if applicable), tpi of leadscrew, micro steps, and steps per revolution of steppers. I think thats all.
Anyways its not a problem, thats how some of thees machines have 4th axis