I am using micro metal gear motors and the Pololu 3081 magnetic encoder on them. My motors are being driven at 5V. Should I also use 5V as the Vcc of the encoder, or is it safe to put this on 3.3V? I want to read the results using a 3.3V microcontroller.
Yes, you can use 3.3V to power the encoders through VCC while your motor is being powered through M1 and M2 from a different level supply. As shown in the schematic on the product page, the motor channels, M1 and M2, are completely separate from the encoder circuit.