Thanks for the reply Bill, It looks like this might be more of a problem than i anticipated. I tried putting the disks closer to the photo transistor in hope that it might produce a squarer signal but that did not work.

supplying a square wave to the chip works fine. Even manually pulling the pin low with a mechanical switch does not produce unwanted pulses!

I might also try increasing the value of the pullup resistor so that it is much easier for the transistor to pull the pin low. I read on here someone using the sensors from an old ball mouse had to go in the order of 10m to get to pull low at all. These sensors are more sensitive/powerful but it might help reduce the issue of non-saturation of the transistor on the edge of a trigger point.

If all else fails i'll have to look at one of the chips you mentioned. I don't really want to go adding debouncing to the code and miss pulses at higher rpm.

Thanks for the input!

Andrew