Hi,
I Think it's just a matter of time, so to speak....
If your top speed is 2"/sec I'm going to guess that a typical slow speed is something like 0.05"/sec. At that speed, with 55 pulses per inch, the signals period time is 1/(55*0.05)=363ms, then you're doing that on two "channels" (no, they are not measuring the two pulses simultanously).

There's really not much the software can do about that, it can't update the output of it doesn't get any input and the input is only updated ~1.5 times per second at such slow speed.

Using tachometers is better since they are continous output devices but you may need some preamplifier to boost the output voltage at slow speed - it all depends. And you're going to need a precision rectifier or an external ADC that can measure both positve and negative voltages since the polarity of the output changes with direction of rotation. Changing to higher resolution encoder is another option.

/Henrik.