Timing question -- Atmega328

What is the smallest unit of time an atmega328 can accurately measure?

Depends on the clock speed. In general, it is one timer tick of a /1 timer, which is the clock speed.

Note that this would be impossible to sustain - a lot more work is needed to setup another capture event.

No, I don’t need to sustain it nonstop. I just need it to be very precise when I’m using it as a wheel encoder. Check out my other posts in the project topics.