Encoder is physically similar to potentiometer, but instead read voltage variation (or resistance) send binary code, what the USB controller interprets as key press.
Turned clockwise send one press (e.g A) turn anti-clockwise send other press (e.g. B).
In Flight Simulator is useful for things like set COMM radios, select weapons, set bombsights, autopilots... or for example in il-2 BoS adjust trim (in this not assignable to analog axis) be wheels controls. In racing sim is used for adjust brakes bias, etc. Any control that use + and - inputs can be benefited by the use of encoder.
