Here's a video I made showing that it outputs in a pseudo-digital way:
From the video description:
This is a simple test I did to see how to decode the output from a VCR knob. First, I used a multimeter while I moved the knob to find out which pins went where inside the device. Then, upon finding that it's a sort of pseudo-digital output, I wired it up to some LEDs and started turning it. I didn't get any output when I turned it right, but I'll figure that out eventually.
By the way, my digital camcorder has a REALLY nice macro mode built in (if you haven't already noticed from the video). One time, I held the camera up to my netbook's screen while it was set to macro mode and I could see the individual pixels INSANELY crisply; so crisply, in fact, that I could see the individual RGB bars.
Expect a post about the DIY-intosh tomorrow. Right now, I have to get some sleep.