Before I try the smoke test...

[Basicmicro Support]

Behidn every signal pin is a 5v(+) and GND pin. Next to the Encoder pin inputs are +(5v) and -(GND) pins. There are also LB + and - pins. The LB + pin is a power INPUT so dont connect your encoders to that pin. All other + pins should run the encoders without a problem.

You should ocnnect your Arduino signal pins to S1 and S2 and a common GND from teh arduino to any of the GND pins on the Roboclaw.