Rotary Encoder Problem

Here is my problem(s)

As stated before, I want my LED's to light when they're increasing or decreasing. A problem I'm having is that the LED will light when turned CW (causing the encoded value to go up, viewable via serial monitor), but when I turn the encoder CCW, the up LED only turns off when the count coming out of the A and B get below Zero. (Viewable via serial monitor)

You never update the value of lastEncoded, so it is always 0.

Another problem is the switch. I thought that when the switch is pressed that it would send a high pulse in, so I tried to make a statement that was along the lines of

if (encoderSwitch == HIGH)
{
analogWrite(A0, 255) //supplies 5V to the LED on pin A0 when Pin is pressed
}

But this doesn't yield any results.

The variable encoderSwitch is a pin number. To get the actual value you have to do a digitalRead(). Also make sure it's set as an input. I recommend reading some of the examples http://arduino.cc/en/Tutorial/HomePage, and all of the documentation Arduino - Home.