Another video showing some results of my science weeks of this year's HackadayPrize:

The resolution of the sensor stripe I used in the video is 42 micrometers, thus we get approximately 580 sensor pulses per Inch at the Arduino. The resolution of the sensor disc (32 teeth) on the threaded rod as shown in the previous video is around 10 micrometers, thus it is clearly better. However there are some advantages in using a linear sensor.