It is a hall-effect sensor. They come in different flavors, but the most common is one that switches on when a magnet passes by and switches off when the magnet passes by going in the opposite direction.
I am going to be doing a review of the unit sold by HighSpeedPC in a couple of weeks for
www.pcabusers.com
The one I made for myself paid for itself one night when low coolant killed my flow from my pump...