Magnetic rotay encoders.

Yesterday I received a servo motor with encoder to evaluate. The first thing
I did was to remove the encoder cover. I was surprised to see that it was a
magnetic encoder. I am not familiar with them so I did a search on Google
and found a few reference documents that confirmed my suspicion that they
were a TTL encoder and the wiring was similar to that used on other encoders
and was compatible with the G320/G340 and other servo amps.
I hooked it up to a test G320 and confirmed that it was a 500 CPR encoder
that in quadrature was 2000 PPR. It only drew 25 ma thus making it a good
candidate for a small servo driven cnc machine. I talked with Marriss and
he indicated that the magnetic type were usually more expensive than the
optical type. Does anyone have any experience with these type encoders on
working machines?
Dan