@Janger I've got a Shooting Star DRO on my mill and I re-did the X and Z axis installations. The notes in the manual basically say that the rack and encoder head need to be aligned within 0.005" in 2 directions...which I found was darn hard to achieve over the length of the rack since the parts were being mounted to rough castings.
The other 'trick' in my install was that the passage for the rack through the encoder head was NOT parallel to the body of the encoder!?! Again, the notes say this but it didn't really register with me until late in the process. On my mill, the Z encoder is right in front of my face and visually appears to be cocked to one side. I had to enlarge the mounting slots on the brackets I made in order to get the parts installed without binding.
Another minor item: the racks are made of steel and even though they have been in the accordion-tube stuff for their life, there was some amount of corrosion on the teeth. I think this was making the encoder miscount the position sometimes. I used a fine brass brush to clean off the accumulated corrosion and then applied a thin film lubricant (Top Coat) to try to prevent this from recurring.
At the end, I'm pretty happy with the DRO. I do think it can sometimes lose a thou or three on a long, high-speed traverse. I've been meaning to do some tests but never got around to it.
BTW, there are snapshots of the old Shooting Star web site on Archive.org:
HTH
Craig