Joe,
All of my comments were based on a basic quadrature or single channel encoder. Nothing you would be able to add to your bag of tricks. I think my wording may have been confusing you, as to what I was trying to say.

When I say zero I mean when looking at the encoder on a scope. Square wave up or down for polarity. Zero when the encoder is not turning. Flat DC line zero.
When I connect the encoder to the scope, I connect the encoder to a variable DC source, adjusting the voltage for the rating of the encoder. Then look at the square wave (with the time setting as low as possible) to verify the integrety of the square wave and the voltage. I do this to test the encoder before I realease the equipment to the customer. Thats it. If it's a quad I look for a positive square in one direction and a negative square in the other direction. I turn the encoder manually so I can see the square wave plainly. Single channel, naturally I will see only postive or negative. Not both.

gfretwell,
We are aware of the tach and encoder operation. Tach's or (magnetic pickups)" produce the same square wave output as the encoder does. But requires a gear or similar for the tach to see. As each tooth passes the tach it produces a square wave, relative to the tach input voltage.

Encoders use either glass or metal disc's within them that have holes, blank spots, or lines the the encoder light cannot pass through. Each time the light is blocked it produces the square wave.