The Magnetic Rotary Encoder v1.2 is a fantastic building block for positioning systems. The core of this board is the AS5040 chip. This chip is what is commonly called an encoder. What is does is measure and report its location. It does this by reading the changes in the magnetic field surrounding the chip. This chip measures rotational motion like that of a motor shaft. What this means is that when properly assembled, this board will allow you to detect the the position and speed of a motor. If you combine this with a motor and a microcontroller, then you can build a closed-loop positioning system whose speed and position can be precisely determined and controlled, even if something unexpected happens.

Available in the MakerBot Store: http://store.makerbot.com/magnetic-rotary-encoder.html

Full documentation at: http://wiki.makerbot.com/mre2