Due to Popular demand, I've included the original rotary circuit I designed some years ago, for those of you looking for a simpler solution for using rotary encoders.
The 'OutCW' and 'OutCCW' lines should be fed into the LED side of an opto-isolator (Not shown here) (Motorola MOC3010 - C705, available at your local Radio Shack), with the EPIC card on the other side of the Opto-Isolators.
One quick note: This circuit can be further reduced by using Chip # LS7084, which interprets the encoder output as a Clock signal and a Direction Signal. Using this method will eliminate 1/2 of the 74HCT123 One-Shot and one Opto-Isolator.