Aren't pins D2 & D3 the only interrupt pins? I thought I'd need to use the interrupts to make sure I don't miss any encoder pulses.
On a Uno board D2 and D3 are the only user interrupt pins, the mega board has 5 I believe. However if you look into pinchange interrupts, you will see that any pin can be used to generate a interrupt but it takes a few extra steps as you get one interrupt per 8 bit port and then you have to actually read the port data bits to determine which bit(s) changed to generate the interrupt, so a little harder to use.
But more importantly in using a quadrature encoder you do not have to wire both quad channels to interrupt pins to still be able to use it. Just wiring one channel to an interrupt pin and the other to a non interrupt pin will still function. It gets back to how many encoder channel transitions per step you want to process. That is if the encoder is rated as say a 100 'steps' per revolution encoder you have the option to interface it as a 100 counts per rev, or 200 counts per rev, or finally 400 counts per rev. If you wanted to use just one channel as a interrupt source you would be limited to reading it as a 100 step encoder or as a 200 step encoder as you can only get 400 steps if both channels interrupt on change mode.