You might want to consider an IC like this :
http://www.farnell.com/datasheets/20478.pdf
It handles 2-axis and does the whole lot for you (got internal counters and could interface to PICAXE).
It might be spoiling the fun of trying to do it yourself though.
wow, just when I was going to solder all my components !
that is a very good find Jeremy, thanks.
its true, might take the fun out of the whole thing.
what I might do is build both, one with just the picaxe, and one with this chip and compare.
if the picaxe only solution works comparably, then its worth considering. will also keep costs down and keep the circuit board simple.
I blew an LED from a mouse last night
, followed instructions from a website to apply 5v without a resistor.
anyways, I got the IR detector/decoder as posted earlier, so testing it tonight with some code.
will post results. will also order this chip once I understand the bus interface and memory addressing.
have to get a display as well. but thanks to yours and others contributions, I'm fairly confident it'll work.
apparently, there is a mathematical method of converting relative angles from the encoder to celestial angles. you point to a star, measure the relative value, point to another, measure again, and with the formula, it does a triangulation for a third star and then computes the offset for celestial co-ordinates.
i'm far away from that, but might get that done eventually.