I want to run my ac spindle motor as a servo motor.I need to know the rpm
and would like some form of feed back.I mounted a dif. 1000ppr encoder on the
motor shaft.I have the smooth stepper on this machine.Can I use the encoder
connections on the smooth stepper?Or connect to the Bob Campbell
break-out board.How would I reconise this in mach.

You only need the Index pulse at this point for spindle speed feedback, in the future the full encoder hopefully will be read so it may be a good idea to have it  connected at this time or at least have the wiring ready to go and direct to the SmoothStepper would probably be best.
 One thing, is this a proper AC Servo? if so what servo drive will you be using?

Hood

no ,it is not a proper ac servo.I have a vfd connected to the motor for
speed control.It was the easiest way to explain my delema.The encoder does not
have a reference pulse only the a/b channels.I have an optical sensor I mounted on the spindle that
I could use, this is for a spindle referencing pulse.This is the same devise I have on the lathe for indexing.

OK well at this time I dont think your encoder will be any use to you
I am actually in the process of fitting a 17HP AC Servo to my lathe but have not got it connected through Mach yet as I have a fair bit of rewiring to do. I will be wiring up the buffered encoder output from my servo drive but will just be using the index pulse at this time. Hopefully Greg will manage to get the full encoder being used soon for feedback at all times.
Hood