Audioguru, some countries call them 'notes', some 'bills', some 'greenbacks', they are all the same thing with different ink on them.
There are several ways to do it, breaking a light beam as the paper passes through it is probably easiest to implement but it can be done by 'flicking' the stack of paper and counting the sound pressure waves through a microphone as well. Depending on the number of 'notes' involved, it can also be done mechanically with a rotating screw that lifts each sheet in it's thread.
Some countries have 'notes' that contain flourescent inks, lighting them in UV light and counting reflections may be another way to do it. There are places where paper has been replaced by plastic and there are transparent windows in the design, these could be counted optically too.
Brian.