but this modulation that you speak of. what is it?
airman00, thats a different modulation. Thats just a lamen's way of saying a square wave (sending binary).
The modulation I'm talking about is:
take sensor reading with IR xmitter off
take sensor reading with IR xmitter on
subtract both values (thereby eliminating environmental noise)
this is really tricky to do when you are also trying to send data, and not just do line following or range finding . . . and I've never done it myself . . .
I think the TV remotes do this, so if you can hack it to figure it out, it would save you time/effort. You just need to find the tx/rx pins in the remote and in the TV and you are done.