All the fancy stuff is in the code wheel and the Moire mask you stick between your LED light source and your two photodetectors,
The Moire mask must have its bars reasonably close to parallel to the bars on the encoding disk, and it makes life easier if the printed/etched bars on the surface of the encoding disk are on the side facing the Moire disk (and vice versa) and the two surfaces are closer together than the bar spacing.
Parallel bars are a must, but you can live with biggish gaps between the rotor and the stator if you use a well collimated source, so you don't get too much penumbra around the shadows of the bars when they fall on the analysing mask (or vice versa).
Sub-micron encoders apparently use fancier diffraction effects, but the OP isn't interested in this sort of stuff.
In one system I did, we just left about an inch of lead on the legs of the LED and the photo-diodes, and bent the leads with pliers after assembly to get the LED and the two photodiodes in the right places to interrogate the encoding disk through mask. Worked fine, and never gave us any trouble.
----------------- Bill Sloman, Nijmegen