1. A method for optically identifying a product from a reference library of known products based on a reflected spectrum of said product, said method comprising the steps of: applying a broad wavelength light source to said product; processing said reflected spectrum to form a plurality of finely spaced wavelengths, said wavelengths being optically processed to generate signals proportional to an amount of light received at each of said wavelengths; forming a data set relating each of said signals to each of said wavelengths; constructing said reference library of known products by repeating said steps of applying, processing and forming with different products; generating a given set of basis functions for all of said different products and a corresponding set of basis coefficients for each of said different products when constructing said reference library; generating a given set of basis coefficients for said product when utilizing said reference library to identify said product; and classifying said given set of basis coefficients against said reference library to identify said corresponding set of basis coefficients most closely matching said given set of basis coefficients.