Its a high quality 24-pulse encoder, with detents and a nice feel to it. It is panel mountable for placement in a box, or can be pluged into a breadboard (just cut/bend the two mechanical side tabs). This encoder also has a push-button built into it so you can press onto the knob to close a separate switch. One side has a 3 pin connector (ground and two coding pins) and the other side has two pins for a normally-open switch.
Rotary encoders are useful as rotation sensors or selectors and look similar to potentiometers. These rotary encoders rotate all the way around continuously, and are divided up into 24 segments. Each segment has a click-y feeling to it, and each movement clockwise or counter-clockwise causes the two switches to open and close. There is no way to know what the current position is - instead we would need to use a microcontroller to count how many clicks left or right it has been turned.