Would you be able to stick... a piece of paper on the motor? Here are two blog entries I did for what you're talking about.
This one is for speed: http://messingwithreality.com/spinr-up/
This one is for angular position: http://messingwithreality.com/where-am-i/
Unfortunately, they use the Netduino board using C#. The boards are relatively pin compatible, but the Netduino is multitasking.
If you really want to use Arduino, the same can be done, but you have to use interrupts. I'd suggest you do it with the two interrupt pins. I'm working on an Arduino solution but I am having a problem at the moment, but its because I want to use the PWM also. If you're just want speed and position sensing, it would easily get you heading in the right direction. The Arduino version is here: http://arduino.cc/forum/index.php/topic,119846.0.html
Hope this helps.