Problem with magnestic linear encoder

I can't seem to find anything on linear encoders here or anywhere else. I've tryed some examples or ideas given for quadrature rotary encoders, and none of them worked. I have the A and B leaded hooked into digital pins 2 and 3, and +3 and ground. here is the data sheet for the encoder, its the flying leads version.

http://www.sikoproducts.com/pdf/msk2001-msk210-msk320-msk5001-ma502-ma506-ae510-as5101-pin_outs.pdf

http://www.sikoproducts.com/pdf/KDB_MSK210_Magnetic-Sensor_5-2_basic_12-2010_E.pdf

I am trying to get it to work on an arduino uno running arduino 1.0.3.

glenbo8391: I have the A and B leaded hooked into digital pins 2 and 3, and +3 and ground.

Did you mean "+5V" instead of "+3"?

Make sure that the Ground lead is connected to Arduino Ground.

Have you checked the output signals as you run the sensor down the magnetic band?

Are you sure you got the 5V TTL model and not one of the 24V models?

Its actually a +3V encoder, but the data sheet for it didn't have anything for pin assignments because it was hard wired to a readout. I've connected it to the analog in pins, and got readings of between something like 250 to 335 on a and b, and figured out a method to get a distance from those values, but those reading arednt very accurate, and I don't think thats how its supposed to be read anyways.