A type of sensor that measures the strength of a
magnetic field.
A steady current is passed through a thin plate. If a magnetic field passes perpendicular to the plate, then the distribution of the electrons passing through the plate will be skewed, so that there is a higher concentration on one side than the other. This will create a voltage difference that is roughly, but not quite, porportional to the strength of the field. A Schmitt trigger can be tacked on the end to provide a threshold, if you are interested in binary response.
Hall effect sensors can be used as encoders for the distributor in a car engine. A sensor is placed on one side of the path of a distributor's vane, and a magnet on the other. When the vane is not in place, a normal magnetic field passes through the sensor. When the vane passes between the two elements, the magnetic field is short circuited, and the sensor sends a signal.
While they don't have the same resolution, hall effect sensors have a practical advantage over optical encoders in that they can get greasy without inhibiting performance.