[Alan Anderson]

A potentiometer gives you an absolute indication of position. You don't have to get things to a known position and reset a count before you can control it properly. If you use a good-quality pot and take care to route your wires so you don't introduce a lot of noise on the sensor signal, you can get ten bits of resolution easily. That's the equivalent of more than 1000 steps. For a simple arm, the mechanical "slop" is likely to be more than the measurement resolution.

An encoder is perhaps more repeatable, and has the possibility of being more precise, but both require that you know exactly where it started.

You might consider using an absolute magnetic encoder instead of a potentiometer. You can get the same information from them, but the magnetic encoder won't get noisy or develop dead spots the way a pot can. Two of them were provided in the Kit of Parts this year.