As in some of my past instructables, arduino is all about control. The ability to control certain things like displays, servos, motors, and other electrical mechanical devices in a meaningful way. I've covered using potentiometers to determine position and how to drive 7 segmented led displays. This is continuation of that. This is how to directly control a position and display that position on a led display. A potentiometer might work, but it has large limitation. It has a set range of travel. Using a rotary encoder instead of a potentiometer we have almost no limit to how big a number can be set in the position. This might be helpful if you were trying to determine the position of a motor in rotations.
This also is an intro to interrupts. Interrupts are functions that interrupt the main function when something is triggered. Pressing reset on your computer is an interrupt. It allows for small, fast, or critical functions to work in the background.
This instructable uses shift registers to control the 7 segmented display, but they are covered in detail in another instructable. Visit that one for more info. http://www.instructables.com/id/Arduino-powered-7-seg-LED-display-using-Shift-Regi/
ike all my instructables, this one was made at TechShop.