Make:

Mac writes - "I wanted to add a digital compass to my robot, as part of my dead reckoning experiments. I only had four bits for input to read a compass. The Dinsmore 1490 uses four bit to report eight compass points, which is inefficient (three bits are sufficient). While the Dinsmore 1490 is inexpensive ($US14), my budget was limited and I felt I could develop a sixteen-point digital compass for less. My sixteen-point digital compass uses four IRLED-phototransistor pairs, and optical encoder disk, magnets. A parts list, a schematic, and printed circuit layouts for the circuit board and encoder disk are availble through the web page. The compass works and I learned a lot about compass design, through trial and error. I can really appreciate the amount of work that has gone into the development of inexpensive digital compasses." - Link.