a mouse style optical sensor can detect speed and direction at a decent resolution, but if you turn off the computer and move the mouse, then turn the computer back on, the computer will not be aware that the mouse moved. Likewise an abs doesn't really care what position the tire is in, just its speed.
though I expect that two optical sensors on an output shaft where one has one less tooth could create a position signal, based on the time between pulses of the first wheel and the timing difference of individual pulse events of the first and second wheel.
Paul, you got a part number for that encoder?
Edit, sorry you already posted the link
http://usdigital.com/products/encode...rotary/kit/e6/