In other words, will the digital inputs handle 1000 pulses/sec, 100 pulses/sec, 10 pulses/sec??? Obviously the more the merrier.
I have been able to benchmark quadrature encoder reading with a 16MHz Arduino Uno at around 95K counts per second. The program is not doing anything else except processing the interrupts from the encoder.
To get faster than that you will need external hardware or a faster processor.
What is your application?