Graham Stabler had suggested these type of encoders as a substitute for a potentiometer.
I purchased a set of their evaluation boards (and some chips) from Digi-Key.
The chip has several different ways it can communicate (all of them are SPI).
The three wire, read only method looked the easiest so I tried it first.
The evaluation board didn't come with a magnet or other encoder hardware. Here's a picture of the board.
I layered a few boards of expanded PVC together in order to sandwich in a set bearings. I attached a pair of axially magnetized magnets to the end of a carbon fiber rod with some PolyMorph. I held the shaft in place with some more PolyMorph with a couple of washer to smooth out the rotation some.
Here's a picture of my contraption.
My M2.5 nylon bolts weren't long enough to go through all three layers of expanded PVC and still reach to the bottom of the PCB so I had to start the bolt from the bottom layer of the boards. I used a couple of additional bolts to secure the layers together. It shouldn't come as a surprise the readings from the encoder flucutated a lot with this setup. I have some sample magnets arriving today that should let me build a more stable rig (the magnets should be diametrically magnetized instead of axially magnetized).
Even with the fluctuation, it was fun to see the read out from the encoder. The encoder outputs a 12-bit value. My current setup can't take advantage of the sensors full resolution.
Here's a video of the sensor in action. I'm using a QuickStart board to read the sensor and sending the data to a little 7-segment display. The output should range from 0 to 4095.
Edit: See post #15 for latest video (it's a lot better than this video).
The big advantage magnetic encoders have over pots or other encoders is they don't wear out. I suppose the bearings or some other part of the hardware could wear out but the magnet/chip interface is contactless.
Here's a close up of the magnet suspended above the encoder.
This is a paid job (software only). I will likely be able to release the code I write sometime in the future (hopefully soon) but for now, I can't post it.
I think this sensor has a lot of potential. One possible application would be a continuous rotation servo that provides position feedback.