First, the SCB-68 is just a connection interface. The actual data acquisition device is connected to the cable coming from the SCB-68 toward the computer, probably a PCI card inside the computer box.
Differentiation tends to enhance any noise or irregularity in the encoder signal. Some type of smoothing may help. Moving average filters or the Savitsky-Golay filter may be useful.
If you can post your VI with some typical data saved as default (we do not have your hardware), someone may be able to help.
Lynn