Hi,
I'm afraid I don't quite understand. A quadrature signal consists of four states (00-10-11-01), from any one state there are TWO valid states which it can "transition" to, one in either direction. If you don't keep track of Old_Bits it doesn't know in which state it was and will get confused, count in the wrong direction etc - just as it did when you had the delay in there. Are you trying to keep the MotorRPM from incrementing by 4 for each click?

Why don't you simply have an EncoderCount variable which is the one you save to EEPROM, and then you do MotorRPM = EncoderCount / 4. Also, instead of triggering on both the rising and falling edges you could trig on only the rising (or falling) which would give you two counts per click instead of four.

/Henrik.