Ted,
for what your talking about, you want to use Ed's board(s). The index on an Encouder happens faster than mach can "see" it. What Eds board does is capture the index after home is hit, then it will back off of home by an amount of encouder counts that you set. It is super duper accurate.
You CAN, have a seperate Home switch if you want i.e.: a Plus and Minus limit and a home per axis if you want, all you have to have is the inputs available (second parrallel card with reversed bidirectional PP card is helpful). Also, with Eds boards, the switch type that you use is irrelevent, it could be a really inaccurate micro swith if you wanted, since the accuracy of the homing routine is based purley off of the Index pulse of the Encoder, the switch is just a notification to the board to start looking for the Index pulse.
Scott