Problem is, I am having a bit of a rought time trying to figure out how they work, and that makes pondering how to decode the output even harder.
I was expecting them to hold the grey code output, but from what I can tell with my DMM, they just give a pulse as it is rotated, and when at rest, both terminals are open.
It's bound to be a quadrature switch encoder, I use ones like that a lot. It's two SPST switches that make and break in quadrature pattern, so you can tell CW from CCW.
You hook the common to ground and the switch legs to port pins through pull-up resistors. Read them with an encoder routine, makes a terrific input gadget.
When the switches "make" should they stay "made" until the shaft is turned more? Mine seem to make if you get them midway between detents and then go back to "break" when the switch is at rest. I guess what I am getting at is that normal? Do I have to constanly be watching the outputs with my PIC to catch these breif changes in the state of the pins?
If you look in the data sheet for the encoder listed on the Jameco page you'll see a timing diagram that shows the two outputs versus rotation. For CW rotation output A goes open before output B with a 50% duty-cycle for each output. Conversely, for CCW rotation output B goes open before output A.
The signal polarities they show are for the common terminal grounded and pull-up resistors gong to the outputs.