To make the transmitter work would I need a micro controller? Or can I just power it and feed the output of a sensor into it?
Yes, you need a microcontroller.
The description mentioned modulated signals. Does this mean that what my arduino would receive would be a modulated signal?
No. The receiver would receive a modulated signal, and it would demodulate is to get the data that it makes available to the Arduino.
Are there any other things you could think of that would work with an already existing transmitter?
Cheese, bologna, and a little mustard.
Of course, the answers might be just a tiny bit less frivolous if you were to mention what kind of existing transmitter you were referring to.