Thank you guys for responding, :
Grumpy_Mike:
But the controller can not receive voltages higher than 5v, and with the PWM signal (60% effective(?)) this could damage the (jrk)board.
No the output from the PWM pin is 5V maximum. What is this "60% effective" all about?
Besides that, the controller is configured for an Analog voltage input, and not for a PWM input.
A simple RC filter will turn PWM into an analogue voltage.
The 60% effective refers to the average ouput voltage of an alternating signal(with a constant pulse width), where only the Vmax changes in time. I used this incorrect here, because this is not the case with PWM. I actually thought the average of an AC signal was around 70% of Vmax, but my book said 60%, that's why. Sorry!
Thank you for the link.
Paul__B:
You want to derive the feedback voltage for the servo motor controller.
...it does not have to be the whole of that range. Since your input (to the controller) is digital, it will suffice that you restrict that input to values that correspond to the actual feedback voltages - perfectly easy to do.
Secondly, in answer to your original question "will this be durable enough", no it certainly will not. The potentiometer you illustrate is far too flimsy for the task. I cannot suggest a linear transducer particularly appropriate, but since you evidently have an engineering department on hand, I would suggest arranging a gear-driven rotary wire-wound potentiometer specified for durability. If you insist on obtaining a full 0 to 5V output corresponding to the actual range of arc (which should be limited as you do not want to ever have the potentiometer hit its end stops) then you need a ("rail-to-rail") op-amp circuit which you can research. No Arduino! :o
Yes, and that is also exactly what my question was referring to (or atleast should have). So that answers it for me.
I understand that the feedback voltage does not have to be the full 0-5V to be able to control a full-motion movement. This option is also available in the JRK interface. You can either write a code for the Arduino or use the software for the JRK. This is not a problem and works like a charm!
BUT the problem with doing this is, is that I have 2(switched) input signals; 1 from the potentiometer, and 1 from the encoder with a fixed 0-5V output (actually 0-10v with a divider). I could scale the output from the potentiometer with the JRK, but then I would need to rescale it again whenever I want to use the encoder to control the servo. So this is not an option, hence the reason why I wanted to use a potentiometer that had exactly the range that I needed.
I will research further into the Rail-to-Rail OpAmp, because that is probably what I need.
justone:
Is that sliding rod just for reading the position of the lever?
The lever pivots about a fixed center. Then why not just drive a rotary pot that has it's center inline with the lever. A "U" bracket from the lever ( to bypass the pivot area) to the pot.
The original setup uses a hydraulic master cylinder that is connected to a slave cylinder. The rod connects to the master cylinder. My job is to make this action electrically controlled, without modifying the original equipment to much.
So: Yes the sliding rod is used to measure the position of the lever. I thought about using a rotary potmeter on the fixed axle, but that gives me the same problem of not having the full 0-5v out of the box(the motion is only around 40 degrees).
Since this is for an automotive application, I wanted to use an electric accelerator pedal and be done with it. But they insisted that I used the existing lever. 
Thanks for the help and I hope this clears some stuff up.
Lodi,-