There was some error on the nxt's (there were 2 of them) when there was wheel slip (generally it only happend when the side clipped an obstacle. For the application it worked surprisingly well. Basically I had to use 2 nxt bots in an obstacle coures the first robot was a seeker and was allowed to have an IR sensor. It had to find multiple IR beacons around the course and communicate the location back to the second one. The second robot was not allowed an IR sensor but had to have a way to retrieve the IR beacon (spherical). The retriever used the x,y co-ordinates sent by the seeker to get the ball then return it to 0,0 (home). Here is a video i took of the process a bit before the final version, but all in all it shows how it was intended to work. https://plus.google.com/103670107949098796410/posts/A96iapotHns
Now I have ported the software to the Arduino, but this time around I am adding a android phone to the mix that will receive the sensor data and "assumed" x,y position info from the arduino and attempt to reconcile it against it's own mapping and localization. It then could pass back a x,y destination to the ardiuno as an attractive field and possibly modify the arduino's own x,y location if there is reason to believe it is off.
My big concern with the parallax encoder setup for the boe-bot is that it will not be accurate even when there is no wheel error, but I will be finding out soon, because i decided to order it.
Also I did consider using nxt motors, I even looked at a shield that is available for nxt gear, but the nxt bots belonged to the school where I am taking my masters (the arduino stuff is mine) so I would have had to purchase new nxt motors anyway..
Thanks again for everyone help