If the data flow is 2 way then I would look at using a RF transceiver set. For one way data look at possibly using an IR link. Biggest problem with standard low frequency IR like used in remote controls is that a large amount of current gets dumped into the IR transmitter diode and by nature the transmitter is located on the moving portion of the machine where available power may be limited.

Another idea you could look at is to use a near coupling IR diode that is mounted on the centerline of the axis of motion. Then put the detector right next to it such as less than 1 cm away. For this use those small IR devices made by Optek with the built in lenses. These are (or at least were) commonly used as the light beam detectors for the encoder wheels in mice. The short range coupling could care less if one side is rotating with respect to the other.

Here are a couple of data sheet links for the types of parts I am talking about.

IR Emitter Device:
http://rocky.digikey.com/WebLib/Op...,B,C,D.pdf

Photo Logic Detector Device:
http://rocky.digikey.com/WebLib/Op...opl550.pdf

A short distance link can be made with these devices that can handle a modulation bandwidth of over 100 kHz. If you encode the data in a Manchester format, which I would recommend, the effective data rate can be about 50 kHz. This should be quite a good transmission medium for sending data logically at a data flow rate of 5->6 KBytes/second.

Michael Karas