Here's a really cool quadrature encoder and motor driver for the GM17 Gear motor designed by the micro-specialists at Didel.
Four spindles on the trackball have a tiny circular magnet the end; each of these are paired with an SMD hall effect sensor, which are used to measure up, down, left and right movements of the trackball.
This sensor measures 10 full turns, 3600 degrees of rotation goodness.
This ratiometric linear Hall-effect sensor provides a voltage output that is proportional to the applied magnetic field.
Put your finger on the Phidgets circular touch, and it feeds the data back to your PC!
The Phidget Rotation Sensor is a 300 deg. Rotation sensor for the Phidget 8/8/8.