I will ante up my 2 cents... All of the linear actuators ( think electric equivalent of a hydraulic cylinder ) I use have a 10-turn bourns pot in them. Some have a encoder wheel also, but this is for really fast or predetermined runs from one extreme to another. It is a very reliable, easy to implement ( one plastic worm gear and a spur gear ) and can be made to fit nearly any application.
Most importantly, as Nigel stated, it tells you what is where with out moving anything. This is a good thing, trust me. With only encoder wheels you have to "jog" the equipment from one end of travel to the other, then set a reference, do the math, and figure out where you were before you started moving things about. I have seen some equipment do this on start, but usually it is only done when other important info can be gathered at the same time. An example would be a plotter, it takes the head from one end to the other on start, since it will need to do this check to see what size of paper is loaded anyways.