Hello Peter and thank you for the quick response! 
Why I have chosen 10ms is because this has been done before and works really well (not by me), with a PIC processor that has slower speed.
I am sorry to say that I don't completely understand your explanation about "count state transitions directly". How should I do this? Does the wiki have any information about this? Maybe an example code?
The source for all the digital inputs is going to be a variable sine wave that goes thru an op-amp that converts it to a square wave, this seems to be the simplest way of measuring (and maybe the fastest?).
Feel free to add any thoughts and suggestions!
Best regards,
Swoshie