modulated ir

We are making a line follower. We are almost completed with the trivial form that uses IR LED and photodiodes to sense the path.
Now we are interested in using modulated IR so that we can rule out any interference from the ambient light.
Anyone has any experience in doing that, please reply...
thanx in advance..

one more thing... i have this ir led and photo diode pair, both in a package. i dont know the charecteristics of it. it has 2s2b and japan written over it. google did not help. anyone knows about it?
thanx