hey mate,
till now, my project is sleeping, due to lack of time and focus on it. Also, i can't find a big enought DC motor, and can't find a quadrature encoder, i disassembled an hp deskjet printer, maybe i'll use the optical sensors found inside.
I'm in hurry now, i would share some links with you for now, and maybe i'll get back to this thread later.
Here is something great that have been done
**broken link removed** take a look at old posts.
If you already got quadrature encoders, you could say you already have your servo motor. An other alternative is the use of a steeper motor as an encoder, but i'm not sure about it's accuracy, mainly at high RPM
4QD-TEC: Stepper Motor as Encoder ,
Homebrew 20m rig Encoder
About software, try looking for PID algorithms, it's easy, there are some code examples, if i remember well, at the microchip website, there is a PID motor control study paper, and writen program.
Good luck.