The Griffin PowerMate is this rather nifty little metal knob with a usb plug. It has an LED whose brightness can be controlled, and it reports your rotation as you turn the knob or when you press it in as a button. Griffin has some neat desktop software to talk to the device and connect it up to all sorts of things.
Neater still? It's a regular low speed USB HID device - exactly the sort of device the digispark is. It'd be pretty easy to make a PowerMate clone as a digispark shield, perhaps with an iPod-like PCB touch wheel in place of a knob. It'd only need a few resistors, a PCB, the usual header pins, and perhaps an LED.