How to use coordinate strip electrically?
The "optoisolator" is indeed an electro-optical device for reading the stripes on the plastic strip. It most likely has two sensors internally, arranged so that they sense in "quadrature", allowing them to detect not only the amount of motion, but also its direction. The output of each detector is a digital signal that your MCU should be able to handle more or less directly.

In order to use this, you'll have to set up a "quadrature encoder". If your MCU has hardware for this, so much the better; otherwise, you'll have to do it in firmware.