Here's an idea for a cheap HiRes encoder.
An inexpensive optical mouse can be had for US$ 10-20. An optical mouse has an inherent resolution of 400 dpi ( 0.0025" ).
Machine a disk 3.183 inches in diameter. Fasten the disk to the end of your lead screw. Mount the mouse so that it reads the outside edge of the disk.
The circumference of the disk is 10.00 inches. That will give you 4000 counts per revolution! Which with 10 tpi lead screws is 40,000 counts per inch! Or 0.000 025 inch resolution.
This should be enough for the Tim Allen in everyone
robotic regards,
Tom
p.s. or, if you machine the end of your lead screw to 0.3183 inches diameter, forget the disk and just read the screw surface for 4,000 counts per inch.
T