Yes, SS can use the Index pulse from an enocder no problem. Threading is great for me, always was even with the parallel port however I think the SS may even be better. Reason I say this is a key sheared in the headstock gears of my lathe and first I knew was as a thread started the spindle slowed down from 1000 to about 300 by the end of the thread, I was going to E-Stop but I noticed the axis seemed to slow as well. I let it complete the 10 or so passes and when I inspected the thread it was perfect

Hood