Thanks for the great ideas! Incidentally, this is for my senior
project in engineering technology at ucsd. I graduate
in June 04, so thats the timeframe Im working with.

I was looking at my computer mouse, and that seems to do something similar.
What if I use the rolling mechanism that the ball turns and its circuit
board to make a digital caliper?

Even better if I could replace the circuit board completely with something
homebrew!

Thanks!