aBot – Wheel Encoder Mystery Part 2

I wanted to post some additional information on the wheel encoder development.  I have included a picture and a schematic of the setup I am using for testing purposes.

The QTR-1RC digital reflectance sensor is positioned over the wheel (1) with vcc, gnd and signal connected to the breadboard (2) and finally the signal line is connected to pin D2 (3).

All of the grounds: the servo, the +6V power supply, the QTR-1RC, the Boarduino and the +5V power supply are tied together.