If it's in a motor, use the windings. If not, use a hall effect sensor.
Phase will tell you angle; intensity will tell you distance. If you
don't know distance in 2 dimensions, you can use a second hall sensor.
If you don't know alignment, you can use another hall sensor. A BASIC
stamp can do any math you need if you don't have a computer connected.

http://en.wikipedia.org/wiki/Hall_effect_sensor